Late clarification on how USP transfers will be treated post 26th March 2013

19th March 2013

HMRC have provided some late clarification on how USP transfers will be treated post 26th March 2013.This late change relates to clients who transfer in USP and HMRC have confirmed that anyone that transfers in USP, where their income drawdown year commences on are after the 26th March will no longer be subject to the transitional rules introduced in the Finance Act 2011 and they can, therefore, continue in USP until the end of their reference period. HMRC has also confirmed that if a client has transfer in USP pre-26th March and their income drawdown year commences on or post 26th March then they will also not be subject to the transitional rules. Unfortunately, though for those customers who have transferred in USP and their income drawdown year commences prior to 26th March, then they are still subject to the transitional rules.

As an example:

  • A client transfers in USP on 1st April 2013 and their income drawdown income year commences on the 1st May, they will be able to continue in USP until the end of their reference period.
  • A client who has transferred in USP on the 1st March 2013 and their income drawdown income year commences on 1st May will also be able to continue in USP until the end of their reference period.