Tony Hales, Stadia Trustees, comments on yesterday's Budget announcement in relation to QROPS

March 22, 2012 - PRLog -- “There were no surprises for QROPS in today’s Budget announcements and the Government basically finalised all the proposed legislative changes published for consultation on 06 December 2011.

“For those QROPS providers who currently offer more than the 30% maximum allowable Pension Commencement Lump Sum (PCLS), the new legislation may reduce their marketability and therefore significantly reduce the number of QROPS schemes on offer.

“Currently, many QROPS do not apply the same tax relief and income tax charges to resident and non-resident scheme members.  In order to comply with the new legislation many QROPS jurisdictions will need to change the tax rules applied to the pension schemes they regulate thereby retaining their ability to provide QROPS.

“The reporting requirements now mean that HMRC must be notified in the event that a payment is made within the 10 years from the date which the transfer took place.  Previously, reporting was only required within five years from date of leaving the UK.  The impact of this is that those looking to emigrate from the UK need to give due consideration to any existing UK pensions arrangements that they may have, with a view to transferring these to a QROPS scheme sooner rather than later.

“The change to the reporting period has huge administrative implications for QROPS providers and the associated cost of providing this information to HM Revenue & Customs (HMRC) may impact on the annual fees charged by QROPS providers.

“Interestingly, HMRC have not imposed these changes retrospectively, and this may create a wave of activity for QROPS providers between now and the 5th of April, wanting to entice those expats to transfer to a QROPS scheme before this date so as to take advantage of the old rules.”

For further information please contact:
Sarah Evans-Toyne, Melanie Shelley or Chiara Barreca (stadia@broadgatemainland.com)
020 7776 0520

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