Tynwald, the Manx government, approved the changes on October 19 and they were effectual as of the 22, with the first product using the new rules launched by Boal & Co on 1 November.
Cowley said the legislation has effectively created a “third-way” option for providers because, as opposed to simply extending its existing domestic tax approval regime to better accommodate non-domestic applications, the Isle of Man has given the offshore trustee or administrator a platform to enable them to decide how to position the scheme.
“The Isle of Man has proved that the QROPS market is maturing and that there remain many valid tangible reasons for undertaking a QROPS transfer, and with over 8,000 QROPS transfers already completed it’s encouraging that they, like us, see that QROPS is here to stay as a mainstream financial product,” said Cowley.
“The Isle of Man is also banking on its belief that a regulated solution is perceived as being attractive to consumers and therefore it appears not to have deliberately changed its pensions regulatory framework, just expanded the tax approval system that sits behind this to provide more flexibility.”
Cowley added that choice is very important because of the high number of QROPS jurisdictions and, with the Isle of Man perceived as having missed the boat in the early years compared to other offshore centres, this is a very subtle yet proactive attempt to differentiate the Island in a rapidly changing market place.
“As for which jurisdiction will become the most sought after jurisdiction for QROPS, well that will ultimately be determined by clients and given the challenges facing world economies and social benefit systems, the race is only likely to hot up,” he added.
