Gibraltar law change spurs Qrops launch
London & Colonial is planning to launch a qualifying recognised overseas pension scheme in Gibraltar ahead of legislative changes that will allow UK pension transfers into the British overseas territory.
Adam Wrench, head of product and business development for London & Colonial, said Gibraltar’s parliament was due to pass a law in the next two months that will allow UK Qrops transfers and adhere to HM Revenue & Custom’s strict rules governing the products.
He said the changes would allow the territory to become the “European Union jurisdiction of choice” for Qrops.
Mr Wrench said: “The proposed law change will revive what has essentially become a deflated industry for the British territory. We are finally able to complete our range of UK and offshore self-invested pensions.
“Gibraltar adheres to EU regulations and thus provides a flexible and attractive option for UK taxpayers.”
Proposals in the legislation include a maximum tax-free commutation of 30 per cent of the pension fund, a minimum retirement age of 55 and a taxation rate of 2.5 per cent on distributions.
But whether this will address HMRC concerns that ground Gibraltar’s Qrops industry to a halt three years ago is uncertain, according to David Higgins, technical director for London-based Overseas Pension.
He said what Gibraltar could be seen as using specific legislation to accommodate Qrops, one reason why Guernsey fell foul of HMRC rules earlier this year.
Mr Higgins added: “One thing that upset HMRC was Guernsey made specific legislation to accommodate Qrops and it looks like Gibraltar is doing the same. It will be interesting to see what HMRC makes of it and if it thinks 2.5 per cent represents a reflection of local taxes.”