The race is on for lawmakers in Gibraltar to introduce new pension rules to keep the status of one of the leading centres for expat Qualifying Recognised Overseas Pension Schemes.
Gibraltar is the world’s seventh largest QROPS centre, hosting 51 pensions.
But providers and regulators fear that the pensions fail new regulations laid down by the British government for pensions to stay as QROPS.
The new rules start from April 6, 2017.
The new rules remove the old 70/30 rule that requires QROPS outside the European Economic Area (EEA) to ringfence 70% of tax-relieved pension transfers to provide a retirement fund for savers.
Pensions may fail qualifying test
Instead, QROPS providers can offer access to cash for the over 55s on the same basis as pension freedoms allow in Britain.
At the same time, the pension age test is amended so retirement savers under 55 can only access their funds in exceptional circumstances.
The rules that govern Gibraltar QROPs are thought to be written in a way that fails this test.
Despite the fast-approaching deadline, Gibraltar’s QROPS providers are confident rule changes will be agreed by the government in advance of April 6.
The Financial Services (Pensions) Regulations 2017 are expected to remedy the fears of advisers and savers that Gibraltar may lose QROPS status.
The new laws are already drafted and will clearly lay out how pensions are governed in the financial centre.
Race to beat deadline
The rules cover taking benefits, transferring money between pensions and who can join a pension scheme based in Gibraltar. This is expected to include ease of access rules along the lines of those in the UK.
Financial experts in Gibraltar expect the new legislation to be passed before the deadline.
Gibraltar was one of the first global financial centres to host a QROPS soon after the pensions were launched in April 2006.
Local providers voluntarily froze pension transfers to the Rock for several years while a dispute over how retirement benefits were taxed was argued with HMRC.
Since that row concluded in 2013, providers have opened more than 40 QROPS.
Gibraltar QROPS must be licensed under the new rules by December 31, 2017.
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.
