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Topics: Qrops| Expatriate| Tax| HMRC
Her Majesty’s Revenue and Customs (HMRC) has proposed a new set of rules to cut down on the abuse of qualifying recognised overseas pension schemes (QROPS).
HMRC has proposed that QROPS have a stricter definition and narrower time limits in which to report transfers to the authorities.
It also suggests there should be acknowledgements from investors that tax charges may apply before transfers can be made.
Stephen Ward, managing director at Premier Pension Solutions, said the potential rules will have large implications for New Zealand QROPS.
Ward said the rules would stop long-term non-UK residents being able to transfer their pensions to New Zealand and immediately withdraw 100% of it.
The rules come after rumours HMRC feared "pension busting" was rife in New Zealand.
The Financial Markets Authority in New Zealand is also passing rules as part of its pensions bill to clamp down on non-New Zealand residents abusing the tax system.
The consultation closes on 30 January 2012 and any changes would come into effect in April 2012.
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These are NOT New Rules, just Clariciation of the Existing Ones!!!!
The ‘Proposed’ New Rules will, in reality, only affect those 'Overseas Pension Schemes' that didn't qualify, from HMRC's perspective, in the first place. I think it is possible that, if you look at the detail of these ‘Proposals’ and the ‘Existing Rules’, these are not New Rules anyway. They are just clarifying what rules are already in existence. If you look at the existing HMRC / QROPS rules, certain popular jurisdictions have never qualified, even though they are 'Recognised' by HMRC. There is NO such thing as an ‘Approved QROPS’ or even an ‘Authorised QROPS’. They are just ‘Recognised’ and they will only retain their status as long as they obey the rules set out by HMRC. I am not sure what this will mean for the Isle of Man, Guernsey and Jersey (If they decide to go into the QROPS Market Place for Non Residents). These three, along with many other jurisdictions, will need to amend a lot of their rules (Internal and External) to be able to retain QROPS Qualification which, in reality, they do not currently have. I doubt whether they will do this as the fallout from these changes will be worse for the ‘Locals’ and those people that are not involved in QROPS. It's funny that most of the noise being made about these 'Proposed Changes' is from Advisers and Countries that are going to lose out even though they never qualified in the first place. Looks like that the EU route (Subject to some Ts & Cs) is the only one that has any legs especially as there will be, as there always has been, three categories of which Category 2 will be difficult and Category 3 will not work. Just in case it is not obvious, the EU route is in Category 1!!!! Interesting Times.
Posted by: Qyestion