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FAQ 7 – Is a transfer to a QROPS a Benefit Crystallisation Event (BCE)?

  • Uncrystallised
    • Any transfer of uncrystallised pension rights before age 75 will be a benefit crystallisation event. If any of the transfer is above the available lifetime allowance the excess will be taxed at 25%. If the pension rights are protected then the lifetime allowance charge should not apply. 
  • Crystallised
    • Pensions in payment (pre and post 75) can be transferred to a QROPS. Transferring an Unsecured Pension (USP) to QROPS will be a BCE if the drawdown commenced after April 2006. The lifetime allowance test is applied in the same way as conversion to an annuity or reaching 75 and converting to an Alternatively Secure Pension (ASP). Transferring a USP to QROPS is not a BCE if drawdown commenced before April 2006. Transferring ASP to QROPS is not a BCE.

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