QROPS Week - Day 5
The last article of QROPS Week deals with the future. QROPS will remain but will they change again? We already know that there are proposals for the Finance Act 2013 but details are sketchy and open to lobbying and change
April 6th 2012
Qualifying Recognised Overseas Pension Schemes (QROPS) started in 2006 and by April 2012 needed an overall and updating. In many peoples minds the ability to take 100% cashout was an abuse of the principle of ‘an income for life’ which underpins pensions, generally.
To make it absolutely clear and to contradict adverts I have seen there is no longer an opportunity to use QROPS to withdraw 100% as cash.
Another major change was an abuse, as the
and tax authorities (HMRC) saw it, of jurisdictions constructing local tax
regimes to attract QROPS. Now, they have to treat local resident members the
same as non-residents. UK
The effect of these changes, along with other detailed requirements, have changed QROPS.
I would like to look at the affect on some jurisdictions and speculate on how this could change in the future.
Without question, from the commencement of QROPS until April 6th 2012,
the market leader in QROPS. Guernsey acted quickly in 2006, to establish the
right environment for QROPS, and its industry grew very quickly. HMRC however
was always concerned that the local tax regime had been constructed to attract
QROPS and when the 2012 changes were made, Guernsey
had over 300 schemes removed from it’s approved list.
Whilst it is known that
is working hard with HMRC to get QROPS re-instated, it is by no means sure that
they will be successful.
Long before April 2012,
had voluntarily withdrawn from QROPS over concerns about the taxation of
pension income. These concerns have been overcome through direct negotiations between
local officials and HMRC.
There is currently a limited choice of providers but there are schemes up and running. The position of Gibraltar is interesting to expats in
There is a two-fold debate that I’ve heard; Spain
There is no way I’m taking my pension income from
Gibraltar and reporting it on my Spanish tax return.
Email me if you have a view or want to know more about
Soon after April 2012,
had all of its QROPS removed
by HMRC from the approved list. Cyprus
Unlike Guernsey, it is more likely that terms will be agreed to enable
QROPS to be re-established. Membership of the EU is likely to prove crucial. Cyprus
The 2012 changes have worked to
’s advantage. There is a
tax deduction on proceeds for both residents and non-residents. As one of the
world’s leading financial centres, Switzerland did not need to
‘construct’ a QROPS industry. In keeping with its general philosopht, they want
high value, high quality cases and NOT the volume which proved the attraction
to other jurisdictions. Switzerland
More details are available from the QROPS Week series, please refer to Switzerland Also don’t hesitate to contact me for more information but I will need to pre-check some personal details, as the Swiss are very selective!
Before April 2012,
was best known as a
jurisdiction which allowed 100% cashouts. HMRC received much lobbying from
other jurisdictions to unapprove all of the New Zealand schemes. New Zealand
changed its own rules to comply with
HMRC, and has now a QROPS philosophy which is generally well accepted. Some of
those who campaigned AGAINST New
Zealand , have seen their own schemes
unapproved. Irony! New
QROPS has a future! At this time twelve months ago, I wasn’t so certain. April 6th 2012 changes have brought quality to the market and although there will be changes ahead, I think the future is more secure.
But I caution against procrastination as changes cause uncertainty. Better to act now than to risk that the scheme you want disappears. Email me for personal information.
If changes are announced in the
Statement, on December 5th, I will publish them here. UK
Financial Pages in