Canadian Qualifying Recognised Overseas Pension Scheme (QROPS) provider Mackenzie has broken the silence about the delisting of dozens of expat pensions in the country.
The firm claim HM Revenue and Customs (HMRC) has delisted the firms because they suspect Canadian pensions claiming to comply with QROPS legislation break the rules.
Millions of dollars of savings in the funds are frozen until HMRC ends their inquiry – which is likely to be in January.
The provider also revealed all but one Canadian QROPS firm was ‘under review’ – which ties in with the latest official QROPS List published by HMRC which only has entries for three pensions with the Bank of Montreal.
The review is due to end in January.
Canada QROPS funds frozen
HMRC argues the Canadian schemes do not comply with QROPS rules because they allow benefits for savers aged under 55 years old, which is not allowed by UK pension legislation.
Carol Bezaire, Mackenzie’s vice-president, tax, estate and strategic philanthropy, agrees but explained the firm had made special provisions for QROPS.
“What we do at Mackenzie and most Canadian companies that have applied for QROPS status do the same, is set up a restricted account assigned a special number so that we know these are former UK pensions.”
Access to the account not allowed for anyone aged less than 55.
Bezaire did claim some British expats have switched their money to the firm’s QROPS and then tried to persuade the trustees to unlock their money.
French QROPS delisted
Canada opened as a QROPS centre with eight pensions in November 2006.
In April 2014, the number of Canadian QROPS peaked at 101 – reflecting the popularity of the Commonwealth nation as a favourite destination with British expats.
Since then, the number of listed QROPS has steadily dropped to 52 at the start of November, and now to just three run by the Bank of Montreal.
HMRC declines to comment about individual QROPS and the reasons why they are listed or delisted.
Canada is not the only QROPS centre with schemes under review – all 12 QROPS in France have been delisted in November as well, but so far, no provider has given any indication why.
QROPS Information and Guidance
For more information about QROPS and the benefits it provides, download the iExpats QROPS Guide or complete the Get Advice form.
