Personal PensionAug 27 2015

U-turn on misleading Rops information

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U-turn on misleading Rops information

A recognised overseas pensions introducer has u-turned on information provided in a release the organisation sent out, targeted at people seeking Maltese Rops, by publishing a retraction on its website following concerns raised by industry experts.

The original release stated that Qrops Specialists will offer free Qrops transfers from Australia to Malta.

Bethell Codrington, global head for international pensions at TMF Group said of the statements in the release: “Why would you move from an Australian scheme to Malta? You would not be in an Australian Qrops unless you were a resident or moving there.”

“Qrops investment growth is tax free, so an insurance wrapper offers no added tax benefits.”

Alongside this, the release stated that clients assets are ring-fenced and protected through investing in offshore insurance providers, giving the added benefit of reducing a client’s tax burden if a client ever returns to the UK.

The release added that 5 per cent of a client’s pension pot under an offshore bond can be remitted tax-free to the UK every year even if the client moves back to the UK.

Mr Codrington said that the statement about 5 per cent of a client’s pension pot under an offshore bond can be remitted tax free was “factually incorrect”, as the payments represent “taxable pension income” under the Income Tax (Earnings and Pensions) Act 2003.

David Trenner, technical director of Intelligent Pensions, said: “This looks a bit opportunist following the de-listing of almost all of the Aussie Qrops.”

He added the release also did not state details about Australian Qrops such as unauthorised payments.

“The key point is that those who transferred to Australia before 6 April 2015 are fine and if they live in Australia I cannot see why they would want to transfer out now.

“Conversely anyone who transferred to Australia after 5 April 2015 could be caught by HMRC action even if they transfer again.”

FTAdviser made contact with Qrops Specialists to share with them the concerns highlighted by other commentators.

Qrops Specialists’ Richard Malpass, who is listed on the website as an “independent financial advisor”, told FTAdviser that he agreed with the comments made.

“We are just writing an article with a retraction of the statement concerning the comments regarding the offshore bond.

“Qrops Specialists are not based in an environment which is currently regulated as we are based in South East Asia. We have not had any enquiries from the press release.

“Most people in an Australian Qrops are staying in an Australian Qrops and that is our advice currently to those who transferred before April this year and intend to retire in Australia.”

Mr Malpass added that the firm uses regulated IFAs in the UK for any final salary pension transfers.

“The press release was targeted at people who want a Malta Qrops: mainly for Brits who have a home in Australia, but also have a home abroad in a third country, for example in Asia.

“There are a number of options for clients; this is simply another option for those who want to exit from an Australian Qrops and for those who had started the paperwork, but never transferred.

“A Gibraltar Qrops may also be an option for those retiring outside of the UK and Australia. There are also other options including leaving a pension in the UK. Every case is unique.

“Generally, any enquiries we used to get for Australian Qrops before April 6th, 2015, we sent to Australian regulated IFAs.”

He added that the advisers at the firm were not working for free, stating it was “only the Qrops set-up fee which is waived”, and that there were annual fees for the investment bond and annual fees for the Qrops which are “explicitly stated” and signed off by clients.

“There may be exit fees, an unauthorised tax charge and possibly tax issues of moving out of an Australian Qrops depending on when the transfer took place. Retirees really need to speak to international tax attorneys to seek best advice.”

ruth.gillbe@ft.com