Employment Tax

Treatment of pension contributions to non-UK pension schemes

Produced by Tolley in association with John Hayward
  • 21 Feb 2022 11:39

The following Employment Tax guidance note Produced by Tolley in association with John Hayward provides comprehensive and up to date tax information covering:

  • Treatment of pension contributions to non-UK pension schemes
  • Introduction
  • Corresponding relief ― to 5 April 2006
  • Migrant member relief
  • Qualifying Overseas Pension Scheme
  • Obtaining migrant member relief
  • Tax relief on employer contributions
  • Definition of relevant migrant member
  • Transitional provisions: members previously subject to corresponding relief
  • Contributions to other overseas pension schemes

Treatment of pension contributions to non-UK pension schemes


This guidance note sets out the part of the tax regime associated with overseas pensions. It looks at how those rules operate in relation to those individuals who decide to live in the UK and continue to make pension contributions to the overseas pension scheme of which they were a member before their arrival in the UK.

The current treatment of such contributions evolved from the provisions that applied in the period to 5 April 2006. This guidance note summarises the earlier provisions before looking at the current rules in more detail.

Corresponding relief ― to 5 April 2006

Before 6 April 2006, a non-UK domiciled employee who was in receipt of earnings from overseas whilst working in the UK for a non-UK employer could remain as a member of an overseas pension scheme.

This was allowed so long as HMRC accepted that the overseas scheme ‘corresponded’ to what was then known as a UK ‘approved’ scheme. In such circumstances, tax relief in the form of ‘corresponding relief’ was available in respect of contributions made to that scheme.

In broad terms, an overseas scheme ‘corresponded’ with the UK regime if it:

  1. was established in the country where the employee either resided or worked immediately before coming to the UK, or was an international pension scheme for all expatriate employees

  2. was recognised by the relevant authorities in that country as a pension scheme

  3. provided a reasonable amount of benefits (generally considered to be a maximum pension of 70%

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

There's no margin for error. Think Tax.
Think Tolley.

TolleyGuidance gives you direct access to critical, comprehensive and up-to-date tax information and expertise you can rely on.


Popular Articles

Interest received net or gross

Interest can best be thought of as compensation for the use (or retention) by one person of a sum of money which belongs to another. Therefore, in order for a payment to be interest, there must be a principal sum on which the interest is calculated and both amounts (the principal and the interest)

16 Feb 2022 10:26 | Produced by Tolley Read more Read more

Property partnerships

OutlineFor income and capital gains tax purposes, partnerships are regarded as being tax transparent ― ie they are not taxed in their own right but instead taxation is applied to the partners.Accordingly, if the partners are individuals, then much the same considerations apply as for an individual

21 Mar 2022 07:31 | Produced by Tolley Read more Read more

Quoted companies ― an overview

What is a quoted company?Reference to a quoted company is usually to a company where the shares in the company are listed on the London Stock Exchange, any other international stock exchange, or on AIM or ICAP Securities and Derivatives Exchange (formerly the PLUS market and now known as ISDX) in

22 Mar 2022 12:12 | Produced by Tolley in association with Andrew Rainford Read more Read more