Gibraltar prepares for green light on Qrops
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- HMRC axe falls on Guernsey Qrops as 300 schemes closed
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Steven Knight, chairman of the Gibraltar Association of Pension Fund Administrators, said members were gearing up to be a destination for qualifying recognised overseas pension schemes from the UK if the government passes a law next month, which is expected to gain HMRC approval.
The new law will impose a 2.5 per cent tax on annual distributions from imported pensions, a minimum retirement age 55, and access to 30 per cent of the fund in a tax-free lump-sum.
Mr Knight, who is also chairman of pension management specialist Castle Trust Group, said the government in Gibraltar will pass the law to ensure it meets UK Qrops requirements.
He said the territory will fill the void left after HMRC de-listed hundreds of international pension schemes in other jurisdictions earlier this year, notably more than 300 in Guernsey.
He said: “Gibraltar’s new tax law to facilitate Qrops is helping to ensure worldwide adherence to the high standards for retirement provision that the UK requires.
“That is the bullish view of GAPFA in support of members’ new push to attract Qrops. For the past three years, GAPFA members have voluntarily put on hold applications to create or transfer Qrops to Gibraltar during extensive discussions involving the previous Gibraltar government on imported pension funds.
“The law has been introduced specifically to enable overseas pensions to be domiciled here, having regard to the new rules introduced by HMRC for Qrops.”
The association has organised a seminar and workshop on Qrops, with a keynote presentation by Marcus Killick, chief executive of Gibraltar’s Finance Services Commission.
Mr Knight said the seminar would establish a code of practice on how association members handle Qrops so that Gibraltar is regarded as a “safe and secure home for pensions fully compliant with UK requirements”.
HMRC has yet to give the green light and has given no indication of whether it will accept the new jurisdiction. A spokesman said: “We don’t comment on individual jurisdictions.”
London & Colonial is planning to launch a Qrops in Gibraltar ahead of the legislative changes, which it believes will make it a “European Union jurisdiction of choice” for Qrops.
Some Qrops advisers, such as David Higgins, technical director for London-based Overseas Pension, said it was uncertain whether Gibraltar’s new law would address HMRC concerns.
One reason why Guernsey fell foul of HMRC rules was because it made specific legislation to accommodate Qrops, particularly in regard to local taxes. Mr Higgins said Gibraltar could be seen as doing the same thing through its new laws.