QROPS Substantial Changes

[al007]

As many know the UK Chancellor in his March statement imposed an immediate tax of 25% on many transferring their pensions outside the UK and into QROPS, there are some exceptions

 

I believe it might still be better to take this hit  of 25% sooner rather than later, and free the fund from Uk taxes totally and legally, so long as you remain outside the UK

 

There has for a long time been talk of removing the personal allowance for non residents, and this would effectively substantially increase the amount of tax paid by non residents on a pension from the UK, there is no way on funds in the UK to shelter tax regardless on where you live

 

What is less known is that on March 16 2017 legislation was passed in the UK allowing flexible drawdown for overseas QROPS, effectively abolishing the 70% rule, effective April 6 2017

 

http://www.legislation.gov.uk/uksi/2017/398/pdfs/uksi_20170398_en.pdf

 

I can only talk about Gibraltar but I understand they are currently in the process of amending their legislation to allow this to happen, there is talk of a possible higher tax than the 2.5% imposed on pension withdrawals, for amounts taken from drawdown

 

Each scheme will also need to amend its rules, and change or amend trust deeds, In Gibraltar I would expect all this to be completed by around the end of April earlier with some good luck

[LannaGuy]

Remove the personal limit for what reason?  we have worked all our lives and paid into the system. Disgusting.

[al007]

On 3/18/2017 at 6:00 PM, LannaGuy said:

Remove the personal limit for what reason?  we have worked all our lives and paid into the system. Disgusting.

Life is not always fair

 

the Uk chancellor has to raise money without loosing votes

 

Most expats do not vote I do with a postal vote

 

Pensions especially QROPS are an easy target

 

So all I say is do not be scared by current legislation if you believe you are gone for good maybe get your assets out even at a price

 

Just for the record I have two cancers I do not believe that is either fair or unfair but I need to face reality

 

I consider I am a lucky man, but we make our own luck, I bit the bullet when QROPS were closed off in guernsey, I was in Gibraltar within two weeks, the writing was on the wall. I escaped 

 

do not moan do something about it

 

I find the negative side of TV and the  TV moderation difficult, I have had a fantastic amount of support from Sheryl on the medical part

 

I am thinking of quitting TV but believe I can add and help many

 

I unlike many try to give back some of what I have received

 

If you read this and agree please give a like.

 

I have kept a copy of this post

[LannaGuy]

On 3/18/2017 at 9:34 PM, al007 said:

Life is not always fair

 

the Uk chancellor has to raise money without loosing votes

 

Most expats do not vote I do with a postal vote

 

Pensions especially QROPS are an easy target

 

So all I say is do not be scared by current legislation if you believe you are gone for good maybe get your assets out even at a price

 

Just for the record I have two cancers I do not believe that is either fair or unfair but I need to face reality

 

I consider I am a lucky man, but we make our own luck, I bit the bullet when QROPS were closed off in guernsey, I was in Gibraltar within two weeks, the writing was on the wall. I escaped 

 

do not moan do something about it

 

I find the negative side of TV and the  TV moderation difficult, I have had a fantastic amount of support from Sheryl on the medical part

 

I am thinking of quitting TV but believe I can add and help many

 

I unlike many try to give back some of what I have received

 

If you read this and agree please give a like.

 

I have kept a copy of this post

Thank you for your post and i wish you every blessing for a recovery

 

I have an NHS pension which starts next year hence I am keeping my eyes open for any changes but I accept my old age pension will be 'frozen'

 

As for TV I have the same difficulties you have and have just come back from a 5 day ban but I can say no more about my feeling on the justification of that or I'll be off again    but I am cutting back my postings on certain topics

 

stay well and thank you for your response  

[robertthebruce]

22 hours ago, LannaGuy said:

Remove the personal limit for what reason?  we have worked all our lives and paid into the system. Disgusting.

 

 

With you 100 percent,,..Disgusting....

[robertthebruce]

On 3/18/2017 at 9:34 PM, al007 said:

Life is not always fair

 

the Uk chancellor has to raise money without loosing votes

 

Most expats do not vote I do with a postal vote

 

Pensions especially QROPS are an easy target

 

So all I say is do not be scared by current legislation if you believe you are gone for good maybe get your assets out even at a price

 

Just for the record I have two cancers I do not believe that is either fair or unfair but I need to face reality

 

I consider I am a lucky man, but we make our own luck, I bit the bullet when QROPS were closed off in guernsey, I was in Gibraltar within two weeks, the writing was on the wall. I escaped 

 

do not moan do something about it

 

I find the negative side of TV and the  TV moderation difficult, I have had a fantastic amount of support from Sheryl on the medical part

 

I am thinking of quitting TV but believe I can add and help many

 

I unlike many try to give back some of what I have received

 

If you read this and agree please give a like.

 

I have kept a copy of this post.

 

 

Kind of Sheryl to give you support on the medical side....

 

hope all goes well....

 

wish you luck....

[wordchild]

You had a QROP in Guernsey and moved to Gib? What on earth for? You would have been better staying as you were, surely. Former Guernsey based QROP,s have no particular disadvantage vs other QROP,s  and even, in certain circumstances, have some advantages.

 

 

 

[al007]

29 minutes ago, wordchild said:

You had a QROP in Guernsey and moved to Gib? What on earth for? You would have been better staying as you were, surely. Former Guernsey based QROP,s have no particular disadvantage vs other QROP,s  and even, in certain circumstances, have some advantages.

 

 

 

Not quite correct, i was about to transfer from a Uk SIPP to a Guernsey QROPS, I also had a house in Guernsey, however just days before the transfer QROPS in Guernsey were delisted, so I found another home that also allowed the Interactive Brokers platform, hence I went to Gibraltar, Malta was no good because my pension would have been taxed at a comparatively high rate in Gibraltar it is only taxed at 2.5%

[al007]

Today there is more press comment on the UK chancellor attacking pensions, to fill his budget hole

 

 

 http://www.internationalinvestment.net/other/uk-pensions-raid-foreseen-chancellor-looks-plug-budget-hole/

 

Fair or unfair that is irrelevant, not fair but still irrelevant

 

There is also less static in the UK if he attacks those living outside the UK

 

So all I am suggesting, if you are permanently gone from the UK, even at a cost like 25% that today sounds bad  if possible cut your ties and the chancellors ability to tax you, an old saying first loss best loss

[jacko45k]

On 18/03/2017 at 6:00 PM, LannaGuy said:

Remove the personal limit for what reason?  we have worked all our lives and paid into the system. Disgusting.

To give them more revenue for taxes.

As a non resident you are unlikely to vote and hence an easy target.

The right to a State Pension while non-resident is also a vulnerable target.

The country needs more taxes with all the immigration and Brexit and to keep 650 expenses cheats in the lower house  and 760 old 'uns groaning about their gout in the  upper one claiming £100s per day.

 

[al007]

More potential problems on Gibraltar QROPS, I wonder if it may delay flexible drawdown, I do feel pretty sure Gibraltar will remedy these problems

 

http://www.international-adviser.com/news/1034891/gibraltar-danger-losing-qrops-status?utm_source=Adestra&utm_medium=email&utm_term=&utm_content=Gibraltar ‘in danger’ of losing Qrops status&utm_campaign=international_adviser_newsletter_2_21_03_2017

[al007]

Every day I read information that makes me so happy I got my pension out of the UK five years ago

 

Now I read in the telegraph more possible doom for UK pensioners who may have their benefits cut more from private sector schemes

 

http://www.telegraph.co.uk/pensions-retirement/news/minister-softens-11-million-workers-pensions-blow/?WT.mc_id=e_DM386532&WT.tsrc=email&etype=Edi_Pfi_New_Mon&utm_source=email&utm_medium=Edi_Pfi_New_Mon_2017_03_22&utm_campaign=DM386532

 

For the record I am fully retired and in no way interested in or looking for pensions business, i write on this topic because I have strong views

[dabhand]

A couple of articles from iExpats on the recent changes to the QROPS rules with comments on flexi access / Gibraltar compliance:

 

http://www.iexpats.com/whoops-hmrc-qrops-rules/

 

http://www.iexpats.com/clock-ticking-gibraltar-qrops-change-rules/

 

 

[al007]

There is I believe a lot of scaremongering going on at the moment on QROPS, I very much believe it will all sort itself out, however that is only my personal opinion

 

The attached article says approval for all schemes will be withdrawn on April  14 and a few days later a new list be issued on April 18

 

 

http://www.internationalinvestment.net/products/hmrc-rops-list-will-suspended-14-april/?utm_source=Adestra&utm_medium=email&utm_term=&utm_content=&utm_campaign=Daily Auto - Manual subject line&utm_campaignid=2498&utm_cmdid=70131

[dabhand]

Seems that Gibraltar is, in fact, on track for full compliance by the deadline date:

 

http://www.international-adviser.com/news/1034944/gibraltar-names-date-qrops-test-regulations-live

Gibraltar’s government has revealed that it will put in place personal pension regulations "on or before 31 March", enabling the jurisdiction’s Qrops to retain their status.

 

Seeing is believing, of course, but sounds like good news for those of us with Gibraltar based Qrops schemes. However, the devil will be in the detail, particularly with reference to the level of tax to be applied to flexi drawdowns. Plus, of course, subsequent confirmation that the connected schemes make the appropriate internal changes in good time.

 

 

[Maximus33]

Its likely Gibraltar Flexible Drawdown will be allowable by the end of 2017 with 20% tax at source.

[al007]

On 3/29/2017 at 4:29 PM, Maximus33 said:

Its likely Gibraltar Flexible Drawdown will be allowable by the end of 2017 with 20% tax at source.

Mike Ashton from Gib Govt has said they will have legislation in place by close March 31, very adjacent, I am watching

 

I know Mike he has personally helped me se we need to wait and see, he generally does what he promises

 

Tax rate who Knows !!

 

Remember individual schemes will also need to amend trust deeds etc

[dabhand]

Well, this has come as a bit of a surprise:

 

http://www.international-adviser.com/news/1035122/gibraltar-shuns-flexible-access-surprise-qrops-twist

The jurisdiction’s new pension regulations, announced on Friday, followed “discussions with the UK authorities” in which it was decided not to introduce flexible access for Gibraltar Qrops. “Gibraltar will keep its current arrangements that require members of Qrops schemes to retain 70% of their total funds to provide a pension income for life. The rate of tax on pension benefits taken from these retained funds will continue to be levied at the current rate of 2.5%,” the government stated.

[al007]

I am currently in Hospital in Bangkok and have been out of touch for a couple of days, and will also be for the next week

 

This is a bombshell Gibraltar saying no flexible drawdown, there must maybe be deeper reasons because it will make Gibraltar uncompetitive in the world QROPS markets

 

I am not sure I believe this will be the situation longer term, I will try and ascertain more from my Gibraltar contacts

 

It further penalises expats further ( Frozen UK Govt pensions)

 

I believe there are ways to substantially increase the annual pension by using actuarial variations

 

If anyone wants help PM me as I do not wish to put on public forum,  a way to substantially bend the rules, otherwise this may be shut as well

 

Any help I offer is without any reward to me

[al007]

On 29/03/2017 at 4:29 PM, Maximus33 said:

Its likely Gibraltar Flexible Drawdown will be allowable by the end of 2017 with 20% tax at source.

Maximus I would be very interested to know the source of your information, it is possible you are better informed than most, many people will be concerned by the apparent NOT granting of flexible access by Gibraltar

[poohy]

Concerned is a slight understatement  on my part! 

[dabhand]

 A further article on the Gibraltar decision to forgo giving flexi access option to Qrops. Looks like no turning back on their decision and they are more focused on EEA based clients.

 

http://www.iexpats.com/gibraltar-qrops-winner-despite-losing-flexible-access/

“It has been confirmed that Gibraltar will be treated as a European Economic Area country in respect of the new transfer charge, which is positive, and so Gibraltar will be able to continue to offer QROPS to individuals living in the EEA subject to the new requirements.”

So, Gibraltar will not offer flexible access to QROPS pensions, but expats escape the transfer charge if they live in Europe, move their pension to Gibraltar and remain living in Europe for five years from the date of transfer.

 

So, maybe time to look at other options. Probably best to wait until after the dust settles and that could be post 18 April when the next Qrops list is published by HMRC. This will show which schemes qualify under the new rules.

 

Hong Kong might be an option. However whether flexible access option is available is uncertain, plus what issues may arise on transfers out of Gibraltar would need to be clarified as a transfer may not even be practical, e.g., possible tax charge if transfers made within a five year period, either from inception or, worse case, from recent change of rules. No doubt there are a number of other location options. 

 

http://www.qropsspecialists.com/qrops-hong-kong-2016/

For example, Thailand and Hong Kong have a Double Taxation Agreement (DTA) whereas Thailand and Malta do not. This means that a QROPS Hong Kong gives the taxation rights to Hong Kong, so if you retire in Thailand, you will pay zero income tax on your pension as their is no income tax in Hong Kong on your pension.

 

The decision by Gibraltar was rather disappointing to say the least as all the signals were pointing to flexi-access being agreed with the only doubt being the drawdown tax rates. I, for one, was foolishly counting my chickens on this happening.   

 

This is the Gibraltar press release:

https://www.gibraltar.gov.gi/new/sites/default/files/press/2017/Press Releases/204-2017.pdf

 

[al007]

This statement that at the moment Gibraltar is not agreeing flexible access, upsets me greatly, (I have a Gib QROPS but due to very serious  ill heath will be able to unlock my whole fund over the next 14 months, I have this in writing and pray it does not change)

 

I can maybe help increase your pension from Gibraltar, by using actuarial determination

 

I can see little benefit of a Gib QROPS, in some ways it is harsher than a UK SIPP

 

I believe what Gibraltar has done is pretty immoral, going against the UK easing of regulations, this I would expect in third world countries BUT not Gibraltar

 

Is Gibraltar now looking to line its own pockets at the expense of old and existing clients who have over the years provided them with good income, can they be trusted

 

I believe an action Group needs to be set up to challenge this decision

 

I know a lady leading an action group trying to help all those  with in Gibraltar who have lost their QROPS funds due to scammers, and I will talk to her

 

On a brighter Note I see the UK govt is around April 20 debating pension increases for those who at the moment do not get them, like people living in thailand

 

I urge you if you have a postal vote like I do, to lobby your UK MP in advance

 

As I often say I get no reward for help I offer and also seek no reward

[al007]

On another thread the following was posted that I believe may be misleading re QROPS

 

According to one source "the 70% rule for QROPS outside the European Economic Association are (sic) scrapped, which effectively extends flexible access to all the expat pensions".

It would be nice to see other sources confirming this.

http://www.iexpats.com/first-april-qrops-change-comes-into-force/

 

What actually happened was the UK amended legislation to abolish the 70% rule, this does not mean all jurisdiction allow flexible drawdown, before it can be granted they have to amend their own laws and none have so I believe at the moment

 

Gibraltar has said it is not changing the 70% rule, so no flexible drawdown is available there , sad and unfair I believe but that the law in Gibraltar

[al007]

I have just succeeded in getting half of my QROPS paid to me and suffered only 2.5% income  tax, I have received the cash

 

I will get the remaining 50% in twelve months time

 

I have done this on the basis of ill health, NOT flexible drawdown which has yet to come to Gibraltar

 

I have fought this one for 9 mths where there is a will , there is a way,

 

Not only did the trustees agree but also GIB tax office and Gib Government as did UK HMRC QROPS Dept

[poohy]

Was talking to my account manager in Gibraltar yesterday, flexible withdrawal is completely off the agenda there now it seems

[al007]

1 hour ago, poohy said:

Was talking to my account manager in Gibraltar yesterday, flexible withdrawal is completely off the agenda there now it seems

Post 16 maximus said he thought by the end of the year, I asked his source he never replied

 

Poohy you may be correct,iI also think Gibraltar may have sold individuals down the hole to protect their own business would greater payments help you, if so I have some ideas

 

Effectively what i did was use actuarial basis to increase frequency of my payments to two based on very bad medical reports,

 

With no flexible drawdown I bet little new business is being written

 

Poohy whats your age , if you have no other UK income then back to a sipp, and take £11,000 perannum under flexible income drawdown and no tax

 

Maybe you need a class action against the Gibraltar regulators, for discrimination despite UK relaxing the laws, that might just stir the pot sufficiently

 

I know a few gibraltar lawyers

[dabhand]

Have also had recent discussions on the Gib flexi access possibilities and looks very much like being unlikely in the short/medium term They are too focused on the EEA issue so are throwing all others under the bus.

 

I am now looking at the Sipp route with, as noted, taking as much advantage of currently having no UK income. At least for this and next tax year. Probably delay my UK pension (luckily at the max level and due early next year) by a year or so, with advantage of two budget increases plus the delayed uplift, so no tax hit.

 

There are other tweaks that can also help. 

 

Just have to look at the costs of having both a Qrops + Sipp, plus what minimum is acceptable for setting up a Sipp.

 

That should be fine for me, short term. Then look at the Gib status in a couple of years.  

[al007]

I am a simple retired Chartered Accountant, I neither work nor seek work, however I have I believe a better knowledges of SIPP and QROPs than most financial advisers, I have also had both of these pensions, and there is no financial benefit to me giving incorrect advice unlike many advisers who may profit

 

I am always happy to help people and if anyone needs an unbiassed view I will willing give my phone number if you PM me , and I can help you with the questions for your financial adviser to answer

 

On SIPPs I do like and favor Hargreaves Lansdown, for self administered and low cost of running and set up, if you are considering a SIPP you need to do a 10 yr cash flow minimum of when you are in retirement, remember all drawdown will be subject to UK tax whether or not you live there, and agregated with the UK pension

 

Gib tax on drawdown is only 2.5 %