Oz and NZ could lose QROPS dominance

Australia and New Zealand will see their share of the qualifying recognised overseas pension scheme (QROPS) market fall due to a tightening of tax laws, experts claim.

Figures released by Her Majesty’s Revenue and Customs (HMRC) have revealed the top six destinations for qualifying recognised overseas pension schemes (QROPS) for 2011 by market share.

The figures, obtained by Guernsey QROPS provider Concept Group, show Guernsey has having the largest market share of 32%.

New Zealand holds 28% of the market share, whilst Australia has 20%, the Isle of Man 5% and Malta with 1%.

The total money moved overseas from the UK using QROPS legislation is now £1.4bn, HMRC's figures show.

Roger Berry, managing director of Concept, said: "New Zealand remains popular but with the latest draft regulations seeming likely to be accepted, QROPS may soon only be available to New Zealand residents which will significantly affect their market share.

"New Zealand has been the centre of choice for ‘release' of pensions back to members without paying an income for life."

New Zealand's new regulator, the Financial Markets Authority, is pushing for legislation that could shut non-residents of the country out of its pension schemes.

Alan Reynolds, technical manager at London & Colonial, said Australia is also likely to see a QROPS decline.

"Australia has been the leading QROPS destination but activity is tailing off, because there is a clash between UK pension rules and Australian tax rules, particularly for those in drawdown," said Reynolds.