The GFS Superannuation Scheme is only the second Qualifying Recognised Overseas Pension Scheme of this kind to be made available to investors from Hong Kong.
GFS has structured the pension under Hong Kong’s Occupation Retirement Scheme Ordinance (ORSO), a regulated retirement regime which is available to residents and non-residents of the jurisdiction.
According to Simon Harrall, chief executive of GFS, the ORSO structure means there is no 55% tax on death if the scheme is in drawdown, unlike the Isle of Man, Gibraltar and Malta. In addition, said Harrall, there is a 0% rate of tax at source on any pension payments in Hong Kong.
HM Revenue & Customs’ concerns over Gibraltar’s 0% income tax rate was what caused the jurisdiction to suspend its QROPS business between 2009 and last year. However, Harrall said Hong Kong differs from Gibraltar because both residents and non-residents are treated the same for tax purposes.
Harrall added the 0% income tax regime is not to be misused in respect of dual tax treaties, however can in some circumstances allow for favourable allowance in some tax treaties under article 17 of such treaties which states: “Any pensions and other similar remuneration…paid in consideration of past employment to a resident of a contracting state and any annuity paid to such a resident shall be taxable only in that state.”
The scheme is registered with HMRC and is now open for applications. There is a choice of a “lite” scheme for cases of less than £150,000 which has a set up fee of £345 and an annual charge of £345 or, for larger cases, a scheme with a set up fee of £695 and annual fee of £995.
Transfers into the scheme can be made for a fee of either £495 or £345 depending on the size of the case.
