Budget '08 analysis: Pensions

Overseas pension schemes

Migrant workers in the UK and their employers can obtain tax relief on contributions to non-registered pension schemes based outside the UK. In order to apply appropriate UK tax controls on reliefs equivalent to those for registered pension schemes it is necessary to work out how much UK tax relief has been received on the individual's pension fund.

Under the law the larger the employer contribution the lower the proportion of an individual's pension fund is treated as having received UK tax relief.

A new measure will ensure that the amount of the employer's contribution will not affect the calculation of the proportion of the fund that is subject to UK tax rules.

Regulation making powers

With effect from the date when the Finance Bill receives royal assent existing regulation making powers will be amended to:

• allow certain payments from pensions schemes to...