bobsimpson51

Hi Bean,

I do not use a Malaysian QROPS we only use IOM, Guernsey and Jersey, no I am not advertising just offering help in quite a complex area?

We do not limit help to Brits only either btw

Thanks,
Bob

Otto The Squid

You raise a good point. The way I read it that EU rules mean that the UK has to have something like QROPS in place for free movement of capital. Whether HMRC "like" QROPS is another discussion.

These new rules are a bit of a hamfisted way of cracking down on pension busting. We have all seen the adverts for "100% tax free cash" and " Totally HMRC approved" and " Take your pension fund in cash , all with the blessing of HMRC" and so on. You can still see this on websites now, I wonder how long the words approved and 100% tax free cash stay on the "advisers" websites after this.

Clearly, HMRC have had enough and have undertaken an investigation into how widespread this is. What I am now wondering is whether, having collected all this data, HMRC will go on a fishing expedition looking for revenue or whether they will draw a line under this( with the new rules) and move on. Time will tell.

However, the new rules do not impede anyone from moving their pensions to a QROPS- for retirement purposes. What the new rules will do is increase the reporting and therefore costs of running QROPS, which may well be passed on to the consumer.

The consultation period is extremely short, cynics might argue that this is deliberate and that HMRC have pretty much made up their mind and this consulation period is a formality. The financial services companies are trying to digest all the changes and you can expect a lot of representations to HMRC.

Peter Crawley

This is the only time that I have seen a constructive discussion about this subject on a forum. It would be useful if people could put up credible links to updates on the progress of these reforms.

bakedbean

Agree with you there, Peter.

I'm going through a "disillusioned with it all" syndrome. I think I'm going to wait till

- Euro countries have imploded
- UK has left the EU
- UK has UKIP in charge
- Sterling has strengthened significantly

But I may be dead by then.

Domino

know how you feel bb, as I am also very cynical.

2 people same age living in council houses next door to each other working at same company.
#1 buys his house thru the Thatcher scheme, also buys Gas shares and keeps them. Saves as much as possible by adding more shares, personal pension, contributes to company pension. Few holidays abroad, mostly keeping the house well maintained and a little conservatory on the back.
#2 lets the council do all the work on his house, goes down the pub every night, takes the MRS down the working mens club over Saturday evening and Sunday lunchtime. Loads of holiday to CDS, life and soul of the party. Thinks pensions, inc company ones a waste of time

Time goes by, they both need to go into a home as they cannot cope on their own.
#2 gets the maximum the state can give him, nothing to pay, all done for him
#1 is found to have assets, so must sell his house to contribute to his upkeep, shares sold, his pensions are used to balance out his other payments on a £:£ basis above a certain figure.

at the end of the day we all leave this life the same way, with nothing, which is how we came in.

Nick Clegg needs to realise that all those #1's who have saved for their retirement are not the vultures all the #2's are, in fact the #1's shoud be the ones who should be looked after as they want to retain their full independence. But no, he wants to tax theire pension funds, he wants to tax them on their incomes from pensions, he wants to make them pay for what spendthrifts are getting for "free"

Cradle to Grave Welfare sounds fine and dandy, a real socialist goal.
Just you have to find some prats who are going to pay for it.

bakedbean

Yup... We are probably going right off topic... But i wholeheartedly agree with what you say. I'd be quite depressed if it wasn't for the fact that i escaped in 2005 and saved so much more money in a low tax country (Singapore) which in turn meant I could retire early. And UK cannot take any of that away from me

Domino

Well you already know I have alot of respect for the Lion City, old Lee's legacy still lives on.

The old system of having a low income from pension and losing the whole lot on death is nothing but usary. It leaves dependents in a parlous state for their retirement after the tragedy of losing their loved one. It also makes no account for wanting or needing to retire in the sun for medical or just pure lifestyle.
I see QROPS as a means for those who now live offshore to take their hard saved money with them, provide for their retirement and also for their loved ones afterwards.

On other threads we have been bombarded by posters only there for the purpose of spreading lies and distortions, claiming they have got 100% of their money back to do what they want to.
The problem is that money has been saved under certain conditions and they think they can pull out gaining the benefits without any payback. I can see why HMRC are very twitchy about this matter.

But glad you are enjoying the area, remember driving a Ford Capri on a beach on east coast and also drove up from Spore to KL, stayed in hotel overlooking the cricket pitch. When the Commonwealth Games were in KL was really chuffed that something started\finished at the Govt Building, where I remember buying stamps for cards back home back in 1970.
If my life had turned out different it would have been nice to be out there as well.

Otto The Squid

I remember the day my father turned up in a new bronze Mark I Capri, having just sold the Morris Traveller, happy days!

Back on topic, assuming people still have the will to live after reading this thread, there is a lot of factual and topical information on the Linkedin "QROPS ( Qualifying Recognised Offshore Pension Scheme)" group.

A lot of the main industry commentators are discussing this now, it is an open group ( with nearly 1,500 members) and so if anyone wants to see what is going on, then they could join it and read the updates. It will be apparent that there is agreement that this market needs to be cleaned up and become far more professional than it is now.

Right, going to try and dig out some pictures of the old Capri from the family holiday in Anglesey.

GOZOPAZ

It should be emphasized that RRSPs (including QROPS held in an RRSP) still benefit from the personal tax allowance. Revenue Canada tell me:

With an RRSP, you still have your personal tax-free allowance of $10K. So if you had no earnings in a given year and you withdrew $10K from your RRSP, you'd pay no tax. If you withdrew $15K, you'd be taxed only on the amount ($5K in this illustration) over your tax-free allowance, that is, you would pay $500 tax. Etcetera. (The personal allowance is in fact slightly over $10,000 at present.)

Tax is applied individually, so you cannot apply your spouse's tax-free allowance to your RRSP deduction. Can you split an RRSP between your spouse and yourself? No, say Revenue Canada. Tax is applied to whoever's name is on the RRSP.

The taxes on RRSPs (including QROPS transferred to RRSPs) are withholding taxes, so you can get back any money owed you, thanks to your personal allowance, after you’ve submitted your annual tax return.

For anyone just jumping into the thread, the withholding tax rates are, again:

For residents of Canada, the rates are:
o 10% (5% in Quebec) on amounts up to $5,000;
o 20% (10% in Quebec) on amounts over $5,000 up to including $15,000; and
o 30% (15% in Quebec) on amounts over $15,000.
For funds held in the province of Quebec there will also be provincial tax withheld. For more information on Quebec withholding, contact your financial institution or Revenu Québec.

For non-residents of Canada, withholding is 25% unless reduced by a treaty. See IC76-12R, Applicable rate of part XIII tax on amounts paid or credited to persons in countries with which Canada has a tax convention.

GOZOPAZ

You don’t have to live in Canada to put your QROPS in Canadian dollars. RBC cees (a Royal Bank of Canada off-shoot) in Guernsey allow your funds to be held in dollars, euros and pounds. Investment options may be limited. More on this anon.

If you have to submit a Canadian tax return and you invest in Guernsey, Revenue Canada may come down on you. Ask RBC cees: last time I spoke to them, they said they had not been able to get a definitive ruling on this.

Im_and_Er

Being the two countries which have gained a reputation for 100% encashments I think the numbers speak for themselves.

'New Zealand was the second most popular destination, absorbing 28 per cent of funds, followed by Australia 20 per cent'.

Are 48% of QROPS owners really planning to emigrate there in their retirement, I doubt it.

Domino

I am not sure that is a relevent comment as it is surely not the final destination of the individual but the tax regime the individual is happiest with, where (s)he gets the best return for their money, that suits their particular financial circumstances.

I would suggest that if people are being convinced they can get 100% encashment some will be rubbing their hands with glee as it may well get them out the current financial hole they are in. However, as discussed above the paper trail is always there for HMRC to investigate.

This started off as a "rich man's tax dodge" which has been made available to the general public. Everyone has the right to mitigate their taxes, but to make savings tax free and then not pay tax denies everyone.

Otto The Squid

There was an interesting comment made by a well known commentator in the QROPS market on Linkedin last night.

"The sting in the tail appears to be in the enhanced powers given to the Revenue to request ad hoc information under new Regulation 3A, which includes, inter alia, "details of sum or assets [received by the QROPS] and how they have been applied".

My guess is that this will lead to phase II, which will involve individual enquiries being raised (with the intention of establishing whether a particular scheme failed to satisfy the QROPS conditions ab initio) resulting in claims for tax on RPS transfers as unathorised payments (with surcharge).

Call me cynical but what the Revenue appear to be saying, for schemes which have breached the 70% rule, is (in the words of the late great Jimi Hendrix) "I'm comin' to getcha" (cf Foxy Lady off the album Are You Experienced (1967)). "


Whether he is correct, remains to be seen.

Domino

call me naive (everyone else does) but what is wrong with that statement in whole or the red highlighted part.

surely as you say in the following paragraph, where the individual has made arrangements for his pension pot to earn better (but qualifiying) conditions in another country, if the rules are not broken then the particular agreement stands.

That there are certain "financial whizz-kids" out there who have moved on from other scams, such as the boiler plate shops closed down in Gibraltar, Spain etc, as well as a couple of property scams in Spain. They have nowed lighted on to what was originally a rich mans tax avoidance scheme that gave far better payback than the miserly returns with high costs normally found in the UK.

So long as an individual keeps to the rules of engagement, doesn't extract all the money from the scheme to go and buy a yacht or whatever, then theoretically QROPS is a reasonable scheme.
But the scammers in the business will do anything to get their very high commissions even if it happens to be illegal in all states. £$€ is all they are interested in.
now theres a thought, where do they put their money ? ?

Otto The Squid

I think that hits the nail on the head!