Overseas arrangement active membership period meaning

In pensions tax practice, this term describes the span of time for which an individual was actively accruing benefits in a specific “arrangement” within a recognised overseas pension scheme (ROPS), which HMRC uses when testing a recognised overseas scheme transfer to a UK registered pension scheme. It runs from the date benefits first began to accrue under that overseas arrangement, or, if later, 6 April 2006 (A-Day), and ends immediately before the recognised overseas scheme transfer. If benefit accrual under the overseas arrangement stopped before the transfer, the period ends on that cessation date. The term is set out in HMRC pensions tax guidance under the Finance Act 2004 and is typically used to calculate the relevant overseas transfer factor and to assess whether there has been relevant benefit accrual in connection with enhanced protection of lifetime allowance rights. Its practical significance is in determining how much of the growth in overseas pension rights is attributable to active membership after A-Day, which can affect the preservation of protections and the incidence of UK tax charges on transfer. The concept applies uniformly across England & Wales, Scotland and Northern Ireland; it is not a defined term in Irish domestic law.