Gibraltar QROPS providers have had a clear warning from regulators that they need to keep to tax rules.
Financial services minister Gilbert Licudi has clearly spelt out that the responsibility of policing schemes lies with the providers now the government has cleared the way for them to accept incoming pension transfers from Britain.
In a candid speech to a gathering of financial experts at a Gibraltar Funds & Investment Association event in London, he confirmed HM Revenue & Customs had confirmed QROPS laws passed by the Gibraltar government were fully compliant with UK regulations.
But, he carefully pointed out that although Gibraltar had passed the tests as a financial centre, each provider needed to make sure their expat pensions reached the same high standards.
Expat pensions
“The fact we have passed legislation does not actually guarantee the validity of the transfer being considered. It will be up to the individual administrator operating from Gibraltar to make sure they get confirmation and clearance and that particular task done,” he said.
“But the emphasis is on the administrator and operator, rather than the government which has simply provided the legislative framework in order to allow the transfers in the first place. Whether it is valid or not at an individual level will depend on the individual scheme and the administrator getting the necessary approval.”
He also laid another worry to rest for Gibraltar’s expat pension providers.
Licudi told his audience that HMRC had confirmed any transfers to Gibraltar QROPS prior to 2009 were also approved as compliant – which means investors, providers and transferring schemes face no tax penalties.
Gib QROPS ready to go
Gibraltar’s QROPS providers imposed a self-imposed suspension of funds to QROPS expat pensions after HMRC queried the financial centre’s income tax on pension payments.
The long-running negotiations were finally laid to rest in recent months after Lucudi took office as financial services minister following a change of government.
Now, residents and non-residents with a Gibraltar QROPS pay local income tax at 2.5% on pension benefits – although double taxation agreements may change the rate of tax charged for non-residents.
Lucudi also said: “The government is very happy with this as a new line of business which, hasn’t quite taken off yet because we’ve recently passed the legislation, but is going to take off.”
Financial services are an increasingly important component of the Gibraltar economy – accounting for around 14% of employment and contributing more than 20% of GDP.
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