- meet condition “4” which is that local residents and non-residents must be taxed the same and the scheme is open to local residents.
- schemes must report to HMRC for 10 years from date of transfer
- 70% of pension pot must provide an income for life
- The transfer is a benefit crystallisation event for the purpose of the member’s lifetime allowance (see RPSM11100010 onwards). The amount crystallised is the amount of the transfer. If the transfer results in the member’s lifetime allowance being exceeded, the rate of tax chargeable is 25%.
- The transitional relieving provisions under paragraphs 56-58 of Schedule 36 to Finance Act 2004 apply and there is grandfathering of the IHT exemption for the pre-6 April 2006 fund on a transfer to a QROPS.
- US QROPS: Transfers to US 401k schemes are not allowed by the IRS (although you can transfer to a Malta QROPS scheme).
- Australian QROPS must be a complying superannuation plan as defined in section 995-1(definitions) of the Income Tax Assessment Act 1997 of Australia. The scheme is liable to taxation on its income and gains, and is a complying superannuation plan as defined in section 995-1 (definitions) of the Income Tax Assessment Act 1997 of Australia,
- NZ QROPS transfers must be into a KiwiSaver scheme. Available for NZ Residents only.
- Transfers to the scheme made before withdrawal of its QROPS status will be recognised transfers so they will not give rise to an unauthorised payments charge (or a surcharge) on the member or to a scheme sanction charge on the administrator. Transfers made after the date on which the scheme ceased to be a recognised overseas pension scheme or it was excluded will not be recognised transfers. These transfers will give rise to an unauthorised payments charge (and surcharge) on the member and to a scheme sanction charge on the administrator (see RPSM04104500, RPSM04104600 and RPSM04104800).
- The member must sign a statement to confirm they acknowledge that they are aware that a transfer other than a recognised transfer to a qualifying recognised overseas pension scheme of sums and assets held for the purposes of, or representing accrued rights under, an arrangement under a registered pension scheme,
(a) gives rise to a liability under section 208 (unauthorised payments charge), and
(b) may give rise to a liability under section 209 (unauthorised payments surcharge).
QROPS Guidance. What is the Effect of the New QROPS Rules?
QROPS Guidance for the Isle of Man
Boal & Co. have had to temporarily delists their Isle of Man 50c QROPS. This won’t affect current members of the scheme who will be protected from unauthorised payments. The Boal & Co. Trinity scheme is one of only a few QROPS domiciled in the Isle of Man which will be non-compliant post 5 April 2012.
According to a document issued by the company, around 95% of schemes in the Isle of Man are structured under different sections of the island’s pension legislation and will be unaffected – this includes a number of schemes run by Boal & Co.
For the time being, clients can use its other Isle of Man-based QROPS or indeed its Guernsey-based QROPS, Synergy, which will be registered under the section 157e legislation Guernsey has introduced to meet the same new legislation.
Boal & Co. are committed to bringing a compliant IOM 50c scheme back as soon as possible.
QROPS Guidance for Guernsey QROPS
The QROPS industry in Guernsey has worked closely with its government to draft new pension legislation known as 157e. After 5 April, schemes in Guernsey will be able to register under the new section of Guernsey’s pension law and qualify under the new QROPS rules. This is due to residents and non-residents being taxed the same on income, i.e. zero.
QROPS Guidance for NZ QROPS
100% cash-ins of pensions are no longer allowed. Even staggered drawdowns are not allowed either. Non-KiwiSaver schemes have been delisted. Only KiwiSaver Schemes are allowed for QROPS and you MUST be a New Zealand resident. This also limits your investment options and advisers can charge between 5% and 10% in upfront commissions for transfers to these schemes, I would expect NZ QROPS to become less popular. These are really only allowed now if you are moving to live in New Zeaand.
QROPS Guidance for Malta QROPS
Malta QROPS, along with the new Guernsey QROPS 157e are likely to lead the pack. The new Malta QROPS could become the standard de facto QROPS due to their 59 Double Taxation treaties with countries all around the world. This provides an extra level of protection upon drawdown making your income tax efficient. This is especially important if you are a UK expat living in the USA or Europe.
QROPS Guidance for Gibraltar QROPS
Gibraltar have recently strengthened their industry and tightened up regulations. There is a flat rate of tax of 2.5% in Gibraltar. This is one of the best QROPS if you do not know where you want to retire and want a wider range on investment to choose from.
QROPS Guidance and Double Taxation Treaties. QROPS in Malta
List of Countries with Double Taxation Agreements with Malta
Isle of Man
United Arab Emirates
For more information on QROPS guidance, please email firstname.lastname@example.orgNew QROPS Guidance from Inland Revenue. IOM50c Delists by Richard Malpass