In June 2017, Money Laundering regulations were enacted which could have imposed a significant administration burden on pension schemes including providing detailed information on individuals to HMRC. HMRC guidance has now clarified that most occupational pension schemes will not need to register with the trust registration service nor, consequently, have to provide any information as part of these new measures to combat money laundering.
The basis for this easement is that the scheme would not be a “taxable relevant trust” because the only “relevant tax” payable would be income tax that would be expected to be incurred in the normal running of a pension scheme. Examples of permitted income tax payments include those in connection with the lifetime allowance, annual allowance, unauthorised payments and PAYE on payments to members and beneficiaries.
HMRC has confirmed that they inadvertently omitted reference to the overseas transfer charge introduced in the Finance Act 2017 and that they will update the guidance to include this. VAT is not a relevant tax for this purpose.