QROPS have been with us since April 2006 to help United Kingdom pension holders living abroad by permitting them to put all of their pensions into one scheme. This also gave pension holders certain tax benefits like low or nil income tax from their holdings and similar for inheritance tax. Sadly this was frequently abused in a way the HMRC was not intending. With this under consideration the HMRC are proposing many changes to the schemes over the next few days and months. One of the biggest affected jurisdictions is Guernsey.
With Guernsey being such a massive player in the market some options had to be achieved and new proposals have been presented by the Guernsey Authorities for its forthcoming meeting in March.
With the draft changes to the present legislation by the HMRC back on the 6th December 2011 the Guernsey Govt naturally had a good deal of concerns which have been made public for its March meeting.
Since the HMRC statement a small team from the Guernsey Association of Pension Providers, otherwise known as (GAPP), have been taking a look at solutions to the suggestions with the Guernsey govt.. Whilst working alongside the HMRC toput forward Guernsey’s position with them and to keep the GAPP members informed on the way.
The root problem with Guernsey was its treatment of resident and non-residents regarding tax on their pensions with non-residents not being taxed and residents being subject to normal tax that the HMRC felt was biased. If the status of the tax revenue was made the same for all parties then Guernsey would lose its QROPS position!
For existing holders of schemes with the Guernsey jurisdiction would probably not be affected and would be considered permitted. The real issue would be to continue to issue QROPS to new members as well as existing.
The Guernsey govt. has released a new offering that meets the draft HMRC rules.
There’ll be no tax relief on funds paid into a scheme.
Whether you’re a resident or not revenue and benefits may not be taxed.
The pension will be free from tax from both earnings and growth point of view.
If these new proposals are put through in March then all members of a Guernsey scheme will be informed of their options to continue with the scheme or to back out. It is likely that most will opt to carry on
Some facts:-
Minimum commencement age of 55.
70% of holders assigned to pay an income for life.
Commencement payments not to surpass 30%.
All the above as per HMRC rules which is similar to current conditions.
For information on a QROPS pension visit http://qrops-advice.com/ today…
