Guernsey QROPS providers facing a rocky future are looking towards Gibraltar to save their businesses.
Financial firms are eyeing the progress of new draft qualified recognised overseas pension schemes (QROPS) laws through the country’s parliament.
The government expects the bill to pass in to law around the end of June to open the door on UK pension transfers for expats and international workers with UK pension rights.
The new laws provide a 2.5% tax rate on pension payments, which resolves HMRC issues with retirement savers paying tax on Gibraltar QROPS
Gibraltar QROPS have several advantages for providers and retirement savers leaving the UK permanently who are seeking a tax-efficient place for their pension funds to grow.
Pension providers have already announced their intention to base QROPS in Gibraltar.
They favour the country, because unlike Guernsey, Jersey and the Isle of Man, financial regulators follow European Union guidelines that are less likely to see objections raised by HM Revenue & Customs about alleged tax abuse.
Malta is another European Union compliant financial centre looking to offer more QROPS pensions for British expats.
Gibraltar hosts 10 QROPS schemes and the industry is largely unaffected by the recent tax shake-up that saw hundreds of schemes removed from HMRC’s official QROPS listing – with most of the pulled schemes coming from Guernsey (304), New Zealand (41) and the Isle of Man (18).
Although HMRC and the Guernsey tax authority are discussing how to resurrect the Channel Island’s multibillion QROPS industry that reputedly attracted one in three of every offshore pension transfer made in 2012, it is unlikely that any changes are imminent.
The Guernsey government would probably have to draft and pass new laws to smooth the way for most providers to reopen for QROPS transfers.