Jersey QROPS have been ditched by the Channel Island’s government because ministers fear their offshore pension template fails to meet tax rules laid down by the UK government.
Jersey flagged intentions to launch Qualifying Recognised Overseas Pension Schemes (QROPS) for non-residents in the wake of Guernsey’s short-lived S157 pensions – which were promptly banned by HM Revenue & Customs in May.
Like the S157 QROPS, the Jersey pensions were intended to dovetail in to new HMRC tax rules for offshore retirement savers.
Guernsey’s QROPS industry was decimated in April, when HMRC removed more than 300 schemes offered on the island from the market.
They are allowed to manage funds for existing investors, but cannot take on any new business.
Other schemes were also forced to close to new investors in the Isle of Man and New Zealand.
Jersey has long provided QROPS for residents, but wanted to take advantage of a broader market by offering offshore pensions to non-residents.
The government has reportedly spent two years working on the draft legislation.
A draft law was announced, but the government has confirmed the bill is now shelved.
“We are continuing to look at options for providing an international pensions offering,” said a Jersey government spokesman.
The tax issue stems from HMRC’s insistence that financial centres offering QROPS must offer resident and non-resident retirement savers broadly similar benefits – which includes charging the same rate of income tax to both.
Guernsey’s S157 schemes provided different rates to residents and non-residents, and were promptly banned by HMRC.
Jersey’s decision to drop out of the QROPS market comes after the Qatar Financial Centre Regulatory Authority also decided against allowing QROPS.
At the time the QFCRA stated they considered the QROPS market was too uncertain after compliance action by HMRC.