Friday, 31 August 2012

August 2012 Review – Financial Pages in Spain

On 9th August 2012, the blog celebrated it’s second anniversary. At the end of the calendar month, I thought I would reflect on the main issues and topics on ‘Financial Pages in Spain’ during August.

  • UK Pension Schemes



These are the issues that contributed the most feedback. I’m always pleased to receive emails either to seek further advice or to comment on my articles.

Using the statistics provided by my service contractor, I can also indicate the most popular posts in terms of the number of people who visited the pages. They were, in order;

  1. QROPS – Comparing Jurisdictions
      QROPS (Qualifying Recognised Overseas Pension Schemes) are set up to allow a transfer of UK pension rights, abroad, with the full approval and authority of the UK Tax Authorities (HMRC).

      QROPS changed significantly from 6th April 2012, when the UK Tax Authorities (HMRC) altered the rules. The major jurisdictions are now Switzerland, Malta and New Zealand. The new rules have highlighted the need for professional advice. I only recommend fully authorised advisers. Email me for an introduction.

  1. QNUPS – Qualifying Non-UK Pension Schemes
QNUPS were brought about in 2010 in a UK Statutory Instrument called ‘The Inheritance Tax (Qualifying Non-UK Pension Schemes) Regulations. I think it’s important to highlight that because although QNUPS are and must be seen as Pension Schemes, they are often set up alongside Inheritance Tax (IHT) planning.

I was pleased, during the last month, to have my article, in full, repeated by a UK lawyer based in Spain and by a UK SIPP specialist. In order to receive the required specialist advice, please email me.

  1. UK Pension Scheme or Plan but you live in Spain
Expats with pensions often believe that they are ‘stuck with’ the rules as they understood them in the UK. This post deals with alternatives. Overseas Pensions come in many guises. For example, there are QROPS, QNUPS, International Annuities and Section 615. The first step, however, is to understand what you have got.

Write me an email , tell me what type of scheme you’ve got and I’ll make sure you are given the right fully authorised advice.

* * * * * * *

Financial Pages in Spain continues to grow, as I can see from the statistics. Whilst Spain and UK dominate the views of both the Website and Blog, there have been readers from 41 other countries including New Zealand, Malta and Switzerland, which is easy to explain but also the USA and Canada!.

Any issues which arise can be answered on an individual basis if you email me. I’m happy to receive questions from anywhere but my real expertise relates to the UK and Spain.

I am happy to take suggestions from readers about future articles. Please email me with your own ideas or issues that you think need raising.

David Goodall
Financial Pages in Spain

Tuesday, 21 August 2012

Overseas Pension Schemes - UPDATED

Following many changes to UK rules, regulations and legislation, this article is a brief outline of International Pension Schemes as they have existed since April 2012 and updated

Individual advice can be provided by referral to a correctly regulated and authorised firm of Independent Financial Advisers with qualifications that have been checked. Please email me for a referral.

  • QROPS (Qualifying Recognised Overseas Pension Schemes)
These became available from 2006 but went through a major review and changes made with effect from 6th April 2012 (Q-Day). It is a pension scheme set up outside the UK that is regulated and recognised for tax purposes as a pension scheme in the country in which it is located. QROPS have been established in countries across the world, many in jurisdictions with beneficial tax rules. For specialist advice click here

Further information can also be found at ‘QROPS – Comparing Jurisdictions’ QROPS 2012

  • ROPS (Recognised Overseas Pension Schemes)
Though a Scheme authorised by HMRC, it has very flexible aspects. Contributions can be made by individuals or an employer. It is an accepted element that employees can give up income (salary sacrifice) to make contributions. There are also flexible retirement ages available.

Advice can only be given by those firms who are authorised by the Financial Services and Markets Act 2000, in other words, must be regulated. Get this advice by sending me an email with outline information.

  • QNUPS (Qualifying Non-UK Pension Schemes)
An arrangement which meets the criteria set by the regulations the UK government brought out in February of 2010. This is available for a UK or non-UK resident, which gives an opportunity to make contributions to overseas schemes, established as QNUPS, with the knowledge that those funds will be sheltered from UK Inheritance Tax (IHT). Individual advice should be taken in all circumstances from a regulated and authorised adviser. Please email for a recommendation.

For further information please turn to QNUPS 2012

·        Section 615 (UK employees with overseas earnings and responsibilities)
A Section 615 Benefit Scheme allows UK Limited Companies to establish retirement benefit packages for employees who have duties outside the UK. This Pension Scheme satisfies the criteria laid down by HMRC. Importantly, the arrangement is made under legislation which is tried and tested (Income and Corporation Taxes Act 1988, Section 615(6))
Every scheme is submitted and accepted individually, ensuring that the benefits will not be subject to challenge, at a later date. This grants full pension scheme status, which is recognised internationally as a genuine pension arrangement.
More information is available in a previous post Section 615

Do you get the impression that this is complex and that Professional Advice is vitally important? I certainly do and can refer you to the right firm if you email me.

Please, never take ‘advice’ from a newspaper advert, even if accurate they are likely to be biased!

In addition to the Plans outlined above, it is also possible, especially where circumstances are complex, to seek advice from a Chartered Tax Adviser (CTA) who can develop a ‘bespoke’ solution for an individual, couple, family etc based on current legislation. Email me for such an introduction.

David Goodall
Financial Pages in Spain

Monday, 6 August 2012

QROPS (UPDATED) - Comparing Jurisdictions

New Generation QROPS have changed the face of UK Pension transfers to Qualifying Recognised Overseas Pension Schemes. The inclusion of professional advice and the exclusion of ‘cashout’ schemes have improved this valuable arrangement for expats

As a result of the changes, there are now three major options, with a further fourth option which is also covered here;

Malta has four distinct advantages when dealing with British and Irish clients, especially those who become residents in Spain.

  • Malta is an English speaking country
  • A low cost economy
  • A member of the European Union
  • Retirement income can be taken at age 50

After many months of negotiations, Malta as an established Financial Services Centre was given approval by HMRC to offer QROPS in November 2009. Individual trustees then need to get approval from the Malta Financial Services Authority (MFSA). It was not until February 2010 that the first QROPS were approved. Without question, Malta benefited most from the rules changes which became operative from 6th April 2012

I can recommend an adviser if you email me.

Switzerland is a renowned centre for financial services, with security at the heart of it’s offering. There is one aspect of Swiss QROPS which could be seen, depends on your opinion, as either an advantage or disadvantage. The QROPS must be invested 70% in Swiss funds and held in Swiss Francs.

Funds are invested by a Discretionary Manager based in London, regulated by the FSA.

Membership of QROPS in Switzerland is highly restrictive, but for those who qualify and prefer the Swiss franc to euro or sterling, this maybe an excellent choice

·         Minimum fund of SwFr 100,000 (work on £70,000)
·         Retirement from age 55
·         Must be UK non-resident for five or more complete UK tax years
·         Withdrawals taken as lump sum

Though not a member of the EU, Switzerland has many close, financial, connections with UK, Ireland and Spain. Most importantly Double Taxation Agreements are in place.

Due to the EXCLUSIVE nature of the Swiss QROPS offering, I can deal directly with clients, who will be referred to the authorised adviser. Please email me for further information

Gibraltar has approved QROPS but I don’t intend to deal with this in any detail at ‘Financial Pages in Spain

I’m happy to provide information on an individual basis if you email me

New Zealand remains a viable and strong option for QROPS. Please note that since 6th April 2012 full encashment is not possible.

The principal benefits which New Zealand enjoys are;

  • Tax Free Lump Sum is 30% of the Fund Value
  • Flexible income arrangements, as long as the 70% available for income rule is maintained
  • Tax Free investment portfolio which is ‘flexible’

As always, individual circumstances will dictate, but flexibility is certainly a realistic jurisdiction to consider. Email me to have access to professional advice

Comparing features

New Zealand
Good option for Spanish residents?
Has Double Taxation Agreement with Spain?
100% cash equivalent available?
Income paid Gross?
Lump sums are taken as capital (from age 55)
30% Lump sum then flexible income (from age 55)
No, but only a nominal charge
Yes, from age 50


Many advisers will compare all jurisdictions before making a recommendation. The determining of your priorities should be the overriding reason for recommending a particular QROPS. Some advisers only deal with one provider in one jurisdiction. If you’ve received a recommendation and would like a second opinion please email me.

The benefits of a second opinion were set out in an earlier article I wrote a couple of years ago, but still apply

Qualifying Recognised Overseas Pension Schemes (QROPS) are for professional advisers and their clients and hopefully the unqualified, unregulated imitators will disappear.

I guarantee that you will be given only REGULATED advice if you contact me (with brief details) by sending me an email

David Goodall
Financial Pages in Spain