Since the introduction of QROPS (Qualifying Recognized Overseas Pension Schemes) in April 2006, the Channel Island of Guernsey has introduced many schemes that are available to accept UK transferred pension money.
As QROPS have evolved Guernsey, as a reputable financial centre, has been involved in discussions with the UK’s Her Majesty’s Revenue & Customs (HMRC). These discussions have taken place to ensure that Guernsey QROPS can continue as approved schemes, with HMRC, for accepting UK pension transfers.
With jurisdictions, such as Singapore, removed form the HMRC QROPS list in 2008 and other countries reviewed, Guernsey want their QROPS to be viewed favorably by both the customer and the authorities.
One of the first steps that the Guernsey tax authorities took was to restrict the maximum tax free cash lump sum payments to 25 per cent of the QROPS fund, applying to residents and non-residents of Guernsey alike. This applies to pension members outside of the QROPS reporting period as well as those within it.
Another major step was to ensure that any transfer from a Guernsey QROPS, made to a scheme outside of Guernsey, can only be made to another registered QROPS that, broadly speaking, imposes the same restrictions as Guernsey QROPS – such as 25 per cent tax free cash at retirement.
The main concern for Guernsey is that they do not want to be seen as a jurisdiction that encourages 100 per cent cash commutation from their schemes. The Guernsey tax authorities see that as something that could damage their reputation and potentially lead to Guernsey QROPS being removed from the HMRC list.
Global QROPS Ltd can advise people on the benefits of Guernsey QROPS as well as the flexible benefits of QROPS in other countries.