Nervousness surrounding QROPS providers continues as HMRC has published an explanatory note intimating that they are changing the premise of Qualifying Recognised Overseas Pensions Schemes. In the note they have suggested that QROPS should only be used by “migrant workers” wishing to transfer their pensions rather than what it believes is currently happening whereby UK pension holders who have built up their fund (to a maximum of £1.5million) in a tax free environment, will then move it overseas to a tax efficient environment where they will then no longer be taxed on the benefits.
The term “migrant workers” has added to the confusion about the status of QROPS, where some feel that QROPS transfers are only intended now for a worker, perhaps a Indian Doctor who has worked in the NHS for 3 years, has accrued a pension and moves back to India taking his pension fund with him. However others feel that Her Majesty Customs and Excise is merely clarifying that migrants are all those people who are looking to migrate/emigrate from the UK permanently to countries like Spain, Australia and New Zealand. What HMRC is becoming increasingly adamant on is that QROPS should 1. Be held in the country in which the pension holder is moving to and living in and 2. That QROPS should not be moved for taxation purposes.
More confusion is sure to reign over the coming months as the HMRC sorts out what it really wants to achieve. For the most up to date information please contact us at; MyQrops.net