QROPS: TIME FOR A SECOND OPINION?
THE MARKET FOR OVERSEAS PENSIONS TRANSFERS OPENS UP
During the last few months the market for the transfer of UK pension funds to overseas providers via a Qualifying Recognised Overseas Pension Scheme or QROPS has started to open up. We welcome this move and we are well positioned to be able to offer one of the largest and most up to date selections of QROPS.
Until recently, there were only a very small number of QROPS available. Unfortunately, the associated costs acted as a deterrent to many who would have otherwise benefited from the overwhelming advantages of making a transfer.
This is entirely normal in the financial world when a new market arises. The initial entrants are able to charge premium prices. Over time as the market develops new entrants will often seek to obtain greater market share by offering the same or similar products but at a lower price.
GUERNSEY, NEW ZEALAND AND ISLE OF MAN
The good news is that new schemes are beginning to open up the market and many more are due to come to the market over the coming months.
Guernsey schemes tend to be suited to funds in excess of £150,000 with clients typically looking to avoid purchasing an annuity, preserving the capital in the fund for future generations and flexibility on drawing income. We have been instrumental in driving down costs from a fixed percentage to a fixed fee regardless of the size of the fund.
On the other hand, New Zealand schemes are favoured by clients often with much smaller funds looking for immediate access to capital. Again, following a recent visit to New Zealand we have agreed special rates with providers.
For countries, such as Spain with no double taxation agreement with the Isle of Man we tend not to recommend these as viable options for a QROPS transfer.
THE PROBLEMS WITH SINGAPORE AND GIBRALTAR
Transfers to Singapore QROPS were a popular choice by many advisers until HMRC withdrew the QROPS status from all Singapore schemes. From the onset we never liked the Singapore solution and therefore, correctly, it was never recommended by us as a solution.
We are aware of ongoing discussions between HMRC and the Gibraltar providers. These revolve around whether a zero rate of taxation is actually a taxation rate at all. We are aware of recent rumours that the Chief Minister of Gibraltar, Peter Caruana has reached a deal with HMRC regarding the status of Gibraltar QROPS. We will continue to review the situation closely.
We continue to closely monitor other jurisdictions including Malta.
TIME FOR A SECOND OPINION
The transfer of pension rights from any UK registered pension scheme is not a matter to be taken lightly and specialist advice is essential.
If you have already had a recommendation made to you regarding your options why not take a second opinion from specialists at the forefront of the industry?
THE NEXT STEP
For further information on a non obligation basis please complete the enquiry form