HMRC issued draft regulations and guidance notes in December 2011, which are expected to be included in the UK Budget on 21st March 2012 and effective from 6th April 2012.
There are a few changes proposed, most notably: -
• The use of QROPS to access 100% of your UK pension will no longer be possible
• QROPS providers must report back to HMRC on activity for ten years after transfer, rather than for the first 5 years of non-UK residency as was previously
These are not in my opinion, onerous changes and if anything, should clear some of the confusion about what can and can’t be done with QROPS. As I have said since 2007 in dealing with QROPS, they are to be treated in the same way as UK schemes – an income for life being the primary function. And of course, with the added tax benefits of QROPS, they remain incredibly attractive to non-UK residents.
Some jurisdictions must make amendments to their existing arrangements to comply with other features of the draft regulations, such as Guernsey. On 9th March 2012, Guernsey’s tax legislation should be changed to ensure ongoing compliance.
The simple facts are that QROPS are here to stay and should be used for legitimate purposes for those who are overseas. At least with these new regulations, all schemes should be on a level playing field.
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