London & Colonial reports greater interest in EU Sipps
Pension provider London & Colonial has claimed interest in its EU Sipp has substantially increased due to industry confusion created by new HM Revenue & Customs reporting guidance on qualifying recognised overseas pension schemes (Qrops).
The guidance notes, issued on 27 October 2009, cover reporting of transactions for members who have been a non-UK resident for five or more consecutive years.
According to Adam Wrench, product development manager of London & Colonial, while previously there where no reporting requirements by the Qrops manager for non relevant members, the new guidance states that not all the reporting requirements cease for non relevant members.
Mr Wrench said this was a "complete u-turn" on their previous guidance and the HMRC appeared to be troubled by permissible pension scheme investment rules of other countries which can be far more flexible.
He added: "HMRC will argue that they are only interested in what happens to UK tax relieved funds. However, the Treasury is not entitled to income tax from any pension payments resulting from these funds assuming the non resident member never returns to the UK.
"The idea that HMRC is looking to control the permitted investments of a foreign pension scheme for a non UK resident seems draconian to say the least."
The L&G EU Sipp has a similar structure to the UK Sipps, but because it is not a Qrops so there is no reporting requirement to HMRC.
