Isle of Man QROPS are the top choice for IFAs, says a new study.
Just under a third of IFAs (32%) picked the Isle of Man as their favourite QROPS jurisdiction from the 46 available worldwide.
The Isle of Man has 221 different QROPS, making the island the world’s third largest QROPS market by number of schemes.
A quarter of IFAs opted for Gibraltar (26%) as second best jurisdiction, with Malta (22%) coming in at third.
The biggest QROPS centres are Australia, with 38% of all schemes, and Ireland, with 23%. In comparison, Gibraltar QROPS have a 0.6% market share with 18 pensions and Malta QROPS has 0.5% with 16 pensions.
QROPS are special pension rules that allow expats and international workers with British pension rights transfer their funds offshore.
Investment advantages
This can offer tax benefits and other advantages, like estate planning options and more flexible investments.
More than 3,000 QROPS are offered in 46 financial centres around the world.
Most expats and international financial workers find them beneficial, but they are not suitable for all retirement savers.
QROPS investors should take tax advice to make sure they do not unwittingly breach cross-border tax rules – like:
- Those moving permanently to Australia, New Zealand or Canada with a QROPS based in these countries may have to pay an annual wealth tax.
- Popular retirement destinations like France and Spain charge have income tax rates that match the UK, so QROPS benefits may be limited.
The study was carried out by international financial firm Skandia
Growing trend for QROPS
A spokesman said: “The Isle of Man topped the vote by a good way, and this is no real surprise as it is an offshore financial centre of some renown that is familiar to IFAs and their clients.
The research also found that more than half of IFAs with QROPS experience want to grow their offshore pension business over the next 12 months, while another 40% plan to keep their QROPS business at around the same over the next year.
Rachael Griffin, Skandia’s head of technical marketing, said: “In recent years, the market for QROPS pensions has continued to increases and the trend is for the number of clients wanting to take their pensions offshore to keep growing.
“This is fuelled by increasing numbers of people reaching their 50s with a wish to move abroad rather than stay in the UK. IFAs need to understand the needs of these clients and what features and benefits QROPS have to offer them in retirement.”
