Estimated reading time: 4 minutes
The US Internal Revenue Service (IRS) intends to tighten up the rules for expats with offshore pensions in Malta – and the reforms could impact QROPS as well.
The IRS claims many Maltese-US retirement plans exploit loopholes in a tax treaty between the two countries.
It’s too early to say which schemes will come under the new rules as the IRS is busy investigating which funds should be blacklisted and which transactions should be reported to the US tax office.
However, stiff penalties are on the way for expats flouting the rules.
The US Treasury and IRS “believe that transactions involving a Malta personal retirement scheme described in the proposed regulations, and substantially similar transactions involving a retirement arrangement established in Malta, unless specifically excepted, are tax avoidance transactions and should be identified as listed transactions,” said a statement from the Treasury.
However, the reforms will include exemptions for expats who have transferred funds to the Malta schemes in compliance with foreign law.
Malta hosts 32 Qualifying Recognised Overseas Pension Schemes (QROPS), just inching into the top 10 global QROPS providers ahead of Gibraltar.
Meanwhile, the global number of QROPS has hit 2556 – the highest total for over two years.
During the past two weeks, 10 QROPS have opened, while six have been removed from the HM Revenue & Customs QROPS LIst.
Table of contents
HMRC QROPS List – By Country
| Country | No of QROPS |
|---|---|
| Australia | 1764 |
| Austria | 3 |
| Barbados | 1 |
| Belgium | 4 |
| Bulgaria | 2 |
| Canada | 6 |
| EU Institution | 1 |
| Germany | 5 |
| Gibraltar | 28 |
| Guernsey | 66 |
| Hong Kong | 12 |
| Iceland | 1 |
| India | 20 |
| Ireland | 51 |
| Isle of Man | 314 |
| Jersey | 90 |
| Kenya | 2 |
| Latvia | 4 |
| Luxembourg | 2 |
| Malta | 32 |
| Netherlands | 102 |
| New Zealand | 40 |
| Norway | 1 |
| Slovakia | 1 |
| Sweden | 2 |
| Switzerland | 2 |
| Grand Total | 2556 |
HMRC QROPS List – Top 10 Countries
Countries by number of QROPS listed offering the most QROPS
| Country | No of QROPS |
|---|---|
| Australia | 1764 |
| Isle of Man | 314 |
| Netherlands | 102 |
| Jersey | 90 |
| Guernsey | 66 |
| Ireland | 51 |
| New Zealand | 40 |
| Malta | 32 |
| Gibraltar | 28 |
| India | 20 |
| Grand Total | 2507 |
HMRC QROPS List – Changes
QROPS pensions added, amended, or removed in the latest list
| QROPS | Country | Added | Amended | Removed |
|---|---|---|---|---|
| C&G West | Australia | x | ||
| Etchingham Super Fund | Australia | x | ||
| G Hodgkiss SMSF Super Fund | Australia | x | ||
| Ninja Lupa Super Fund | Australia | x | ||
| Preston Pot | Australia | x | ||
| Scotson Super Fund | Australia | x | ||
| Spreadbury Super Fund | Australia | x | ||
| TIB Aus Fund | Australia | x | ||
| G Hynes Superannuation Fund | Australia | x | ||
| K & E Walker Super Fund | Australia | x | ||
| M & L Hingert Superannuation Fund | Australia | x | ||
| Swinscoe Family Super | Australia | x | ||
| Jermy Personal Pension Scheme | Isle of Man | x | ||
| Anthony Willgrass Approved Drawdown Contract | Jersey | x | ||
| Blodwyn Limited | Jersey | x | ||
| Darktrace Netherlands B.V. | Netherlands | x | ||
| Totals: | 10 | 0 | 6 | |
| QROPS listed June 15, 2023 | 2552 | |||
| Net change since June 15, 2023 | 4 | |||
| QROPS listed July 03, 2023 | 2556 | |||
| QROPS Jurisdictions | Added | Removed | ||
| N\a | 0 | 0 | ||
| Totals: | 0 | 0 | ||
| Countries with QROPS listed July 03, 2023 | 26 | |||
| Net change since June 15, 2023 | 0 | |||
| Countries with QROPS listed July 03, 2023 | 26 | |||
| Next HMRC QROPS List due July 15, 2023 | ||||
QROPS List FAQ
The QROPS List is an invaluable free tool for advisers and retirement savers seeking an expat pension.
However, how to use the data is often misunderstood, so here are the answers to some of the most asked questions about QROPS expat pensions.
What is the QROPS List?
The HMRC list tells overseas pension providers and retirement savers transferring funds from a UK pension to a QROPS or between offshore pension providers which schemes qualify for QROPS status.
QROPS providers certify their schemes meet UK offshore pension and tax rules to go on the list, but HMRC warns this does not mean any are approved or sure to be QROPS.
So retirement savers should check the latest QROPS list before transferring any money.
QROPS Overseas Transfer Charge
The overseas transfer charge is 25 per cent of the transfer value of a fund moved into a QROPS or between QROPS.
For expats living inside the European Economic Area (EEA), countries offering QROPS that are not subject to the overseas transfer charge are:
- Austria
- Belgium
- Bulgaria
- Germany
- Iceland
- Ireland
- Latvia
- Luxembourg
- Malta
- The Netherlands
- Norway
- Slovakia
- Sweden
QROPS countries outside the EEA, expats are subject to the transfer charge if they do not live in the same country as the pension is administered – these are:
- Australia
- Barbados
- Canada
- Gibraltar
- Guernsey
- Hong Kong (China)
- India
- Isle of Man
- Jersey
- Kenya
- New Zealand
- Switzerland
Other exceptions to the transfer charge may apply if an employer or multinational non-government organisation runs the scheme, such as the EU QROPS.
A five-year residence rule may also apply.
Click here for official guidance on the overseas transfer charge
Why does HMRC remove pensions from the QROPS List?
HMRC delists QROPS for several reasons, including:
- The provider closes
- The last pension member has left the scheme by transferring, dying, or exhausting the fund.
- Tax avoidance issues
- The scheme stays a QROPS, but the provider invokes confidentiality, excluding the pension from the list.
Delisting should not imply wrongdoing by a retirement saver or provider.
Related Information
Below is a list of related articles you may find of interest.
