The UK’s leading Qualifying Recognised Overseas Pensions Scheme (QROPS) specialist advisers, Global QROPS Ltd, have been quoted in International Adviser, regarding the major proposed changes, made by Her Majesty’s Revenue and Customs (HMRC), to the QROPS legislation.
In potentially the biggest changes to the rules, for transferring UK pension benefits overseas, since the original introduction to the QROPS rules – which commenced on 6th April 2006 – the new proposed legislation will affect all QROPS jurisdictions, existing QROPS schemes and both new and existing members of QROPS from 6th April 2012.
The change, that affects the popular QROPS jurisdiction of Guernsey, is the introduction of “Primary Condition 4” – which has been included in both the draft Statutory Instrument and in the new QROPS application form APSS251.
This new condition stipulates:
“Where an exemption from tax in respect of benefits paid from the scheme is available to a member of the scheme who is not resident in the country or territory in which the scheme is established, the exemption must—
(a) also be available to members of the scheme who are resident in the country or territory; and
(b) apply regardless of whether the member was resident in the country or territory—
(i) when the member joined the scheme; or
(ii) for any period of time when they were a member of the scheme.
For the purposes of this condition “exemption” means any exemption available under the system of taxation of personal income in the country or territory in which the scheme is established other than an exemption which applies by virtue of double taxation arrangements.”
The impact of this new condition will mean an overseas pension scheme (that has QROPS status) will have to offer exactly the same tax regime to its members in their jurisdiction as to those outside of the jurisdiction.
This is currently not the case for resident and non-resident members of Guernsey QROPS where tax treatment of income paid from the scheme is different.
Please see the link to the article: http://international-adviser.com/news/uk/uncertainty-over-qrops-legislation
