New QROPS Developments
By setting up a QROPS (Qualifying Recognised Overseas Pension Scheme), it is now possible to have access to your UK pension, whereas previously, prior to 2006, it has not possible to access the benefits - ie it was 'frozen'. In some cases, an immediate tax free lump sum can be taken out of the QROPS.
The preceding couple of months has seen lots of developments in the QROPS landscape, with many QROPS schemes having been taken away from the HMRC List, and with other jurisdictions looking to make a big push forward in the QROPS market. By far the most serious casualty was Guernsey, with the new QROPS rules effectively shutting down the QROPS industry in Guernsey.
Perhaps one surprise reesult from all the changes, is that Malta has emerged as a leading QROPS jurisdiction.
The Emergence of Malta QROPS
Malta has a full EU membership, and this strengthens it's positions as a valid and robust QROPS jurisdiction.
All retirement schemes on the island are governed through the Special Funds (Regulation) Act 2002, which states that applications are required to be clearly specified and accompanied by a trust deed or scheme document.
While other QROPS jurisdictions developed schemes then had to respond to questions from HMRC, Malta took a different approach - it got HMRC onboard from day one, and created the framework with the help and assistance of HMRC. This gives us the conviction in recommending a Malta QROPS schemes as a favoured QROPS destination.
Although there are fully regulated pension industries in a number of countries outside of the EU, as well as mature international pensions industries in the British Protectorates, we believe that these jurisdictions from a QROPS perspective to present potentially a higher level of risk for advisers, service providers and customers when compared to a QROPS established in the EU - particularly QROPS in Malta.
When looking for a effective QROPS jurisdiction, there are a number of factors which need to be considered. This way, you can transfer your pension to a QROPS in the knowledge that you are reducing to a minimum the potential risk of a QROPS being investigated and potentially disqualified by HMRC at some stage in the future.
These criteria include:
A well developed international tax treaty network.
Secure legislative platform.
Regulated domestic pension environment which includes the need to have all QROPS in the jurisdiction to be audited.
Following a detailed analysis of the available choices, Malta satisfied the above QROPS conditions and had the overall reliability of being based in an EU Member State. Accordingly Malta became the favourite jurisdiction for the QROPS.
Malta's Tax Treaty Network
One of the biggest attributes that Malta carries is that it has an considerable tax treaty network. Malta currently has 57 tax treaties that can, in many cases, confer particular advantages to plan members as compared to the UK tax treaty network that applies to UK registered pension schemes.
The Malta/US tax treaty can be an example where it's often more beneficial for US citizens and green card holders to receive a UK tax relieved pension from a Malta QROPS, rather than pension provider based in the UK or other jurisdiction that offers QROPS.
Gibraltar is also looking to benefit from the demise of Guernsey as a QROPS jurisdiction. It remains to be seen what effect this new legislation will have on the global QROPS industry.
By setting up a QROPS (Qualifying Recognised Overseas Pension Scheme), it is now possible to have access to your UK pension, whereas previously, prior to 2006, it has not possible to access the benefits - ie it was 'frozen'. In some cases, an immediate tax free lump sum can be taken out of the QROPS.
The preceding couple of months has seen lots of developments in the QROPS landscape, with many QROPS schemes having been taken away from the HMRC List, and with other jurisdictions looking to make a big push forward in the QROPS market. By far the most serious casualty was Guernsey, with the new QROPS rules effectively shutting down the QROPS industry in Guernsey.
Perhaps one surprise reesult from all the changes, is that Malta has emerged as a leading QROPS jurisdiction.
The Emergence of Malta QROPS
Malta has a full EU membership, and this strengthens it's positions as a valid and robust QROPS jurisdiction.
All retirement schemes on the island are governed through the Special Funds (Regulation) Act 2002, which states that applications are required to be clearly specified and accompanied by a trust deed or scheme document.
While other QROPS jurisdictions developed schemes then had to respond to questions from HMRC, Malta took a different approach - it got HMRC onboard from day one, and created the framework with the help and assistance of HMRC. This gives us the conviction in recommending a Malta QROPS schemes as a favoured QROPS destination.
Although there are fully regulated pension industries in a number of countries outside of the EU, as well as mature international pensions industries in the British Protectorates, we believe that these jurisdictions from a QROPS perspective to present potentially a higher level of risk for advisers, service providers and customers when compared to a QROPS established in the EU - particularly QROPS in Malta.
When looking for a effective QROPS jurisdiction, there are a number of factors which need to be considered. This way, you can transfer your pension to a QROPS in the knowledge that you are reducing to a minimum the potential risk of a QROPS being investigated and potentially disqualified by HMRC at some stage in the future.
These criteria include:
A well developed international tax treaty network.
Secure legislative platform.
Regulated domestic pension environment which includes the need to have all QROPS in the jurisdiction to be audited.
Following a detailed analysis of the available choices, Malta satisfied the above QROPS conditions and had the overall reliability of being based in an EU Member State. Accordingly Malta became the favourite jurisdiction for the QROPS.
Malta's Tax Treaty Network
One of the biggest attributes that Malta carries is that it has an considerable tax treaty network. Malta currently has 57 tax treaties that can, in many cases, confer particular advantages to plan members as compared to the UK tax treaty network that applies to UK registered pension schemes.
The Malta/US tax treaty can be an example where it's often more beneficial for US citizens and green card holders to receive a UK tax relieved pension from a Malta QROPS, rather than pension provider based in the UK or other jurisdiction that offers QROPS.
Gibraltar is also looking to benefit from the demise of Guernsey as a QROPS jurisdiction. It remains to be seen what effect this new legislation will have on the global QROPS industry.
