Guernsey offshore pension providers have been given a ‘keep away’ warning by regulators running Malta QROPS.
Qualifying Recognised Overseas Pension Schemes (QROPS) are a type of pension that can accept UK pension transfers, to understand more and why they are popular choice for expats around the globe read here
Hundreds of Guernsey QROPS were closed to new business by HM Revenue & Customs when offshore pension rules were revised and many are rumoured to be heading for Malta to continue trading.
However Malta Financial Services Authority chairman Joseph Bannister has made clear the Mediterranean island intends to run a strict QROPS regime without any room for tax management outside the rules by retirement savers.
Bannister confirmed the MFSA was in constant contact with HMRC over tax compliance, in an interview with the Times of Malta.
“Malta must not be seen as a jurisdiction where people can transfer their pensions to avoid tax,” Bannister said.
“HMRC removed QROPS status from a number of Guernsey-based schemes. If Guernsey legislation allowed the establishment of pension schemes which did not satisfy QROPS status requirements, then it is obvious that these schemes would be unable to obtain a licence in Malta.
“In reality, while the authorisation by the MFSA of pension schemes is increasing, these are all new schemes.”
Only ‘five or six’ applications from Guernsey QROPS have been filed with the MFSA, disclosed Matthew Brincat, secretary general of the Malta Association for Retirement Scheme Practitioners.
He also reiterated the recent publication of a QROPS code by the Maltese government was clearly stating how the island intends to regulate pensions and tax.
Malta has launched a high profile media campaign aimed at disassociating the island’s pension industry from other QROPS centres, like Guernsey and New Zealand.
The message is clear – if a retirement saver has a Malta QROPS, then they must file a tax return – if the country where the QROPS investor lives has a tax treaty with Malta, then tax credits are available, if not, QROPS payments will be taxed in Malta.
Malta has 55 double taxation and information swapping treaties with other countries.