Jul 2010

Dominion is pleased to announce the launch of the their QROPS based in Malta with the first transfers into the plan having been processed and accepted successfully.

In 2006, new regulations came into place which meant UK expatriates or foreign nationals who have registered UK pensions, have been able to transfer them to an overseas scheme providing it is recognised by the UK authorities and is listed on the HMRC list of QROPS (Qualifying Recognised Overseas Pension Schemes): http://www.hmrc.gov.uk/pensionschemes/qrops.pdf

The rapid interest in QROPS over the last few years is partly due to the increase of people retiring abroad, but also the realisation that there is no longer a need to be restricted by UK regulations.

The benefits of QROPS include; no liability to UK tax on pension income, more flexibility in funding the plan rather than be limited to the Annual and Lifetime Allowances and greater flexibility than the UK legislation allows in the type of asset the fund is permitted to hold. In addition, if clients choose to live outside the UK in retirement, they may wish to avoid foreign exchange risk and can therefore have the security of pension income being paid in their local currency. QROPS can also be used as a succession planning tool, the level of which will depend on individual circumstances. Individuals who transfer their pension scheme to a QROPS no longer need to purchase an annuity once they have reached aged 75 (77 for those turning 75 after June 21 2010).

Malta differs from other QROPS jurisdictions because it is not perceived as a ‘Tax Haven’ and is a Member State of the European Union which is reassuring in uncertain times for small, independent financial centres. Pension funds under EU legislation allow for greater portability between member states. Although Dominion is a Jersey based Trust company with the Head Office located in Jersey, there is also an office in Malta as we believe that it is crucial for QROPS schemes to be administered ‘onshore’. All Maltese QROPS are regulated on an ongoing basis by the Maltese Financial Services Authority to ensure compliance with HMRC’s QROPS legislation.

Malta already has an established and well-developed commercial infrastructure, which provides reassurance, and it is committed to further development in order to grow its financial services centre. It also has over 50 Double tax treaties with clear and positive tax rules, a strong regulatory framework and a legal recognition of trusts, which allows flexibility for their use as a financial planning tool.

If you would like to discuss or find out more information concerning QROPS please speak to Ben or Stacy on our Wealth Management Team.