topcat10

There have been some interesting developments in Pension transfers via QROPS recently.

Caveat Emptor! As there is concern over how long the HMRC will tolerate tax loopholes that are so overtly advertised.

HMRC have already closed down the Singapore route

Those involved have instructed Counsel in Singapore and also London

There are 3 tiers of QROPS approval:

1 Singapore "pension busting" schemes with no tax payable
2 Schemes which have QROPS into a tax regimen in which no tax is payable on benefits withdrawn ( Despite "Primary Condition 2c " which states :
"all or most of the benefits paid by the scheme to members who are not in serious ill- health are subject to taxation"
3 Schemes that do not "Trust Bust" and which do require some sort of tax to be withheld on benefits paid


HMRC have outlawed type 1 schemes-- and it will be very interesting to see what words are used by HMRC in their vigorous defence of their actions vs.. Singapore . We expect HMRC to close down all such schemes.

Type 2 schemes are the sort of thing advocated by some-- we cannot see this being allowed for long- particularly given Primary condition 2 c as above.

Type 3 schemes are those that do not "Trust Bust" and do require a tax on the withdrawal of benefits unless a DTA is in existence- this is the Isle of Man approach-- in which we have a good relationship with HMRC.

Do you really want the bother not to mention the additional legal expenses in sorting out their schemes which have been disallowed by HMRC, as the schemes' Trustees have been removed as fit and proper persons and the schemes' QROPS approval has been rescinded?

It is clearly a potential gravy train for Legal counsel and we can see trouble ahead for schemes that incur the wrath of HMRC, as well as trouble for their advisers who have given advice to their own clients to take these aggressive options as above!

see :
www://freemypension.com/QROPS/qrops-singapore-loses-approved-status-from-hmrc/#more-32

for some info:

Food for thought-- caveat emptor!
Kind Regards

Tim

JAC-1

TopCat10:

I started reading your post with interest, however, your comments soon lost credibility when you decided to omit the key provision under 'Primary Condition 2', which states:

'...For the purposes of this condition "tax relief" includes the grant of an exemption from tax.'*

I can't comment for alternative jurisdictions but for the sake of clarity and for the benefit of members of this forum, I should point out that QROPS in Guernsey are first established so as to qualify for tax approval granted under section 157 A(4) of the Income Tax (Guernsey) Law, 1975 (as amended), and Exemption from Guernsey income tax is granted for non-Guernsey resident members, under section 40(ee) (ii) of the income tax law.

For ease of reference, below is an extract from The Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006:

*[I]"Primary condition 2:

The scheme is established in a country or territory where there is a system of taxation of personal income under which tax relief is available in respect of pensions and —

(a) tax relief is not available to the member on contributions made to the scheme by the individual or, if the individual is an employee, by their employer, in respect of earnings to which benefits under the scheme relate; or

(b) all or most of the benefits paid by the scheme to members who are not in serious ill-health are subject to taxation.

For the purposes of this condition "tax relief" includes the grant of an exemption from tax."

Regards.