QROPS have been around since April 2006 to help United Kingdom pension holders living overseas by enabling them to put all their pensions into one scheme. This also gave bearers definate tax advantages like low or nil income tax from their holdings and similar for inheritance tax. Sadly this was sometimes manipulated in a way that the HMRC was not intending. With this under consideration the HMRC are proposing many changes to the schemes over the next few weeks and months. One of the biggest affected jurisdictions is Guernsey.
With Guernsey being such a large player in the market some options had to be reached and new offers have been released by the Guernsey Government for its upcoming meeting in March.
With the suggested changes to the current legislation by the HMRC back on the 6th December 2011 the Guernsey Govt obviously had a good deal of concerns which have been outlined for its March meeting.
Since the HMRC announcement a small team from the Guernsey Association of Pension Providers, sometimes known as (GAPP), have been looking at solutions to the proposals with the Guernsey government. While working closely with the HMRC toput forward Guernsey’s position with them and to keep the GAPP members informed on the way.
The basic problem with Guernsey was its treatment of resident and non-residents with regards to tax on their pensions with non-residents not being taxed and residents being subject to normal tax which the HMRC felt was slanted. If the position 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 likely not be influenced 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 proposal that fulfills the newly proposed HMRC rules.
- There’ll be no tax breaks on money paid into a scheme.
- Whether you are a resident or not earnings and benefits will not be taxed.
- The pension will be free from taxation from both earnings and growth viewpoint.
If these new offers are accepted in March then all bearers of a Guernsey scheme will be informed of their options to remain with the scheme or to opt out. It is likely that most will make up one’s mind to stay
Some quick facts:-
- Minimum starting age of 55.
- Seventy percent of holders assigned to pay earnings for life.
- Commencement payments not to surpass 30%.
All the above in accordance to HMRC rules which is similar to current conditions.
For more information relating to QROPS visit http://qrops-advice.com/ today…
Tags: qrops
