Gibraltar looks to revive QROPS business

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Gibraltar looks to revive QROPS business

Gibraltar is revamping its income tax rules so it can begin offering overseas
pensions once more.

Gibraltar’s government put its Qualifying Recognised Overseas Pension Scheme
(QROPS) industry on hold three years ago when the fact that it taxes its own
residents over the age of 60 at zero per cent became an issue of concern for
HM Revenue & Customs (HMRC).

Now however, Gibraltar’s parliament is close to passing legislation that
allows for benefits paid by pension funds transferred to Gibraltar and
administered there to be taxed at 2.5 per cent.

Upcoming laws also allow for a maximum tax-free lump sum withdrawal of 30 per
cent and a minimum retirement age of 55.

This was set out in a statement released last week by Gibraltar’s Ministry of
Financial Services. It was keen to point out that the amendments do not
affect existing occupational pension schemes which have already been set up
in Gibraltar.

Gibraltar’s proposed changes to its pension laws are likely to be viewed
favourably by HMRC.

The taxman has been clamping down on QROPS providers it feels are flouting the
rules, especially those which allow savers to withdraw large chunks of their
pension pots in one lump sum. Many firms have been delisted as a result.

Also in its favour as a QROPS jurisdiction, Gibraltar is a member of the EU
for many functions, including financial services, unlike rival offshore
centres such as Guernsey, Jersey and the Isle of Man (Other OTC: MAGOF.PK – news) .

Steven Knight, the chairman of the Gibraltar Association of Pension Fund
Administrators, said: “Generally, HMRC is keen to ensure aggressive tax
planning, in this case using QROPS legislation, is not used in a way that
was not anticipated which could result in either a reduction in current
taxes to the Treasury or future additional costs being incurred.

“There have been a number of arrangements marketed which aim to release
capital placed in pension schemes which were intended to fund long-term
pension payments.”

Gibraltar’s geographic location lends itself to British expats who have moved
to Spain, Portugal and Morocco.

Under QROPS rules, those leaving the UK on a permanent basis can transfer
their pensions to an overseas scheme and retain their UK tax benefits after
a holding period of just five years, provided the new scheme can demonstrate
that at least 70 per cent of the fund will be used to provide a pension in
retirement.

Refer http://uk.finance.yahoo.com/news/gibraltar-looks-revive-qrops-business-093638582.html

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Gibraltar looks to revive QROPS business

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