Current UK legislation allows EU citizens to transfer the full amount of state pension contributions from the UK to any other EU member state’s contribution fund without applying any tax charges. Accordingly, the procedure can be completed on the HMRC website by downloading the ‘APSS263’ form.
However, it is a must to explain that this procedure would only be tax-efficient if HMRC officially recognises the pension fund in which contributions are transferred to and, particularly, that contributions would be taxed automatically if that is not the case. As a matter of fact, by submitting the form, you authorise HMRC to tax your contribution with a minimum of 40%.
HMRC has introduced very strict rules on the matter from the beginning of the 2017 fiscal year. At the moment, neither Italian nor French pension funds are present on the list of those recognised private pension funds.
Luckily, there is an alternative method which still allows Italian citizens to merge their private contribution into an Italian fund without being taxed. This method consists of transferring the amount available in the UK fund into a recognised fund from Malta. Thanks to the everlasting relationship between Italy and Malta, it would be then possible to transfer the amount back to an Italian pension fund without being subject to taxation.