Wednesday, 31 October 2012

Switzerland QROPS – An Introduction


QROPS Week Day 3

Qualifying Recognised Overseas Pension Schemes (QROPS) have to be approved by the UK Tax Authorities (HMRC) in order to receive transfers from UK Pension Schemes or Plans

Switzerland, as a jurisdiction is very credible being World renowned as a Financial Centre. Not being part of the Eurozone, many expats in Europe welcome the investment in Swiss Francs which gives an element of security.

The Promoters of the scheme outlined below are only seeking low volume, high quality cases.


Key Factors

·       Pension Commencement Lump Sum (PCLS) is allowed (often called tax-free lump sum in the UK)

·       ‘Income’ in the form of capital withdrawal can be taken AFTER 5 years of UK non-residency

·       All withdrawals are subject to a Swiss tax charge of between 2.4% and 4.8%

·       Benefits can be taken at age 55 and must be taken by age 70. Individual concerns about the age range can be discussed

·       The minimum fund transfer is 100,000 Swiss Francs. As a working assumption use €82,000 or £66,000. More accurate exchange rates are available from http://www.fttcurrency.co.uk/fpspain.jsp trading as La Torre Fx – Foreign Exchange.



Fund Investment

·       Investment through an insurance bond is NOT allowed but there are arrangements in place with a London-based Discretionary Fund Manager (DFM) who can handle the investments in Swiss Francs

·       The range of investments is wide but excludes residential property and at least 70% must be in Swiss Francs


Regulation

·       All QROPS schemes are heavily regulated by the Swiss regulator


·       Switzerland is acceptable to UK HMRC due to the existence of a Double Taxation Treaty


·       Switzerland has very many Double Taxation arrangements, including importantly for expats, most of Europe, USA, Canada and South Africa


·       Swiss Residents and Non-Residents are treated equally for tax purposes, so the scheme passes the ‘fairness’ test



Advice

·       ‘Financial Pages in Spain’ will only recommend fully regulated advisers whose services and qualifications have been check. Selecting the correct QROPS jurisdiction is a key element in the role of an adviser

·       The Swiss Custodian (usually Trustee in the UK) keeps strict control over the organisations that it accepts business from. They have seen other jurisdictions disqualified by UK HMRC and are determined they will always offer a ‘clean’ service

·       ‘Know your client’ and ‘Treating Customers Fairly’ are key to good advice. I am dealing with clients myself for this scheme. If you want a discussion, without obligation, please send an outline of your circumstances and I will contact you directly by email, initially.

·       This service is available in Spain and also any country where there are expats who are not UK residents or even intending Non-UK residents


The administration of the scheme is extremely smooth, efficient and (sorry) runs like clockwork!


David Goodall
Financial Pages in Spain

Tuesday, 30 October 2012

New Zealand QROPS


            
QROPS Week – Day 2

Qualifying Recognised Overseas Pension Schemes (QROPS) have to be approved by the UK Tax Authorities (HMRC) in order to receive transfers from UK Pension Schemes or Plans

There are many previous references to NZ QROPS here at Financial Pages in Spain, but this is a complete update.

New Zealand, as a jurisdiction is very credible with strong links to the UK. NZ was one of the first jurisdictions to offer QROPS after their inception in 2006. NZ is now a leader in offering flexible benefits.

Key Factors

·       Pension Commencement Lump Sum (PCLS) of 30% is allowed

·       70% of the fund is used to provide retirement income in line with UK requirements

·       100% cashouts of funds is NOT allowed and advertisers who suggest otherwise are scammers (beware)

·       Income is more flexible AFTER 5 years of UK non-residency and is paid gross, importantly it is NOT determined by UK annuity rates.

·       Benefits can be taken at age 55


Fund Investment

·       Investment through a bond is allowed (e.g Prudential, Aviva etc)

·       The range of investments is wide but excludes residential property

Regulation

·       All QROPS schemes are fully regulated by NZ Financial Services Commission

·       NZ is acceptable to UK HMRC due to the existence of a Double Taxation Treaty

·       New Zealand has very many Double Taxation arrangements, including importantly for expats, most of Europe, USA, Canada and South Africa

·       NZ Residents and Non-Residents are treated equally for tax purposes, so the scheme passes the ‘fairness’ test

Competition

·       There is a good choice of New Zealand QROPS providers which helps to make fees competitive

Advice

·       ‘Financial Pages in Spain’ will only recommend fully regulated advisers whose services and qualifications have been checked. Selecting the correct QROPS jurisdiction is a key element in the role of an adviser and even if NZ is the preferred more than one supplier should be considered

·       ‘Know your client’ and ‘Treating Customers Fairly’ are key to good advice. I will recommend an appropriate Adviser if you email me some brief details


David Goodall
Financial Pages in Spain

Monday, 29 October 2012

Malta QROPS


QROPS Week – Day 1

Qualifying Recognised Overseas Pension Schemes (QROPS) have to be approved by the UK Tax Authorities (HMRC) in order to receive transfers from UK Pension Schemes or Plans

Malta, as a jurisdiction is very credible being in the EU and Commonwealth with strong links to the UK. As part of the Eurozone, many expats in Europe welcome the investment in euros which removes the unwelcome exchange rate fluctuations

Key Factors

·       Pension Commencement Lump Sum (PCLS) of 30% is allowed

·       70% of the fund is used to provide retirement income in line with UK requirements

·       Income is more flexible AFTER 5 years of UK non-residency and is paid gross

·       Benefits can be taken at age 50


Fund Investment

·       Investment through a bond is allowed (e.g Prudential, Aviva etc)

·       The range of investments is wide but excludes residential property

Regulation

·       All QROPS schemes are fully regulated by Malta Financial Services Authority

·       Malta is acceptable to UK HMRC due to the existence of a Double Taxation Treaty

·       Malta has very many Double Taxation arrangements, including importantly for expats, most of Europe, USA, Canada and South Africa

·       Maltese Residents and Non-Residents are treated equally for tax purposes, so the scheme passes the ‘fairness’ test

Competition

·       There is a limited choice of MALTA QROPS providers which helps to make fees competitive

Advice

·       ‘Financial Pages in Spain’ will only recommend fully regulated advisers whose services and qualifications have been checked. Selecting the correct QROPS jurisdiction is a key element in the role of an adviser

·       ‘Know your client’ and ‘Treating Customers Fairly’ are key to good advice. Please email me to be referred to an appropriate adviser, a few details will help


David Goodall
Financial Pages in Spain

Friday, 26 October 2012

QROPS Week


Week commencing 29th October 2012 is QROPS Week @ Financial Pages in Spain. An ideal time to follow the Blog and get your updates

Qualifying Recognised Overseas Pension Schemes

Conceived in the UK Finance Act 2006 but not effectively marketed until late 2007. Major changes were made, in part to remove abuses, from 6th April 2010. QROPS are UK Pension Transfers which require professional and authorised advice and are intended to provide lifetime income.

Key Facts

  • Pension funds accumulated in the UK have received favourable tax treatment, including tax relief on contributions and HMRC will seek to maintain control over the future use of funds. Their fundamental rule is that the fund produces an income for life

  • Only 30% of the fund can be used to provide a Pension Commencement Lump Sum (PCLS) which is often called Tax-Free Cash

  • 70% of the fund is utilised to provide an income for life. The investment of these funds will be determined by local rules but cannot be invested in residential property

  • UK Pension Plans and Schemes can only transfer available funds to Her Majesty’s Revenue & Customs (HMRC) approved QROPS arrangements in acceptable jurisdictions

  • Income can only be paid gross (no tax deducted) from jurisdictions which have Double Taxation Treaties with the UK. Some jurisdictions may however deduct tax on income before distribution

  • QROPS providers can only accept transfers where the advice has been given by authorised & regulated financial advisers

  • No QROPS scheme will be approved if it pays 100% of the fund as cash. The principal of an ‘income for life’ must be maintained

If you require clarification or information please email me

QROPS Week

The following posts will appear during QROPS Week

1.     Malta QROPS

2.     New Zealand QROPS    

3.     Introducing Switzerland QROPS

4.     Developments and the future of QROPS

5.     Comparing QROPS jurisdictions




David Goodall
Financial Pages in Spain