In HMRC’s latest list, there was an 11% increase in the number of Australian schemes to 460, while Isle of Man-based Rops rose by 9.5% to 253 since the list was suspended in June.
Both regions account for nearly 70% of all Rops on the list.
An earlier suspension in April saw a third of schemes dropped, as nine countries disappeared from the list.
Following the initial suspension, the number of Rops fell to 935 from 1,339. After it was suspended for a second time in June, the list dipped to 932.
As of 1 August, there are 1,026 Rop schemes on HMRC’s list.
Australian tax changes
The jump is Australian schemes was driven by the country’s tax year, which ends on 30 June, Darion Pohl, director of financial and pension advice firm Prism Xpat told International Adviser.
“Many wide-ranging Australian Super changes were brought in from 1 July,” he said.
These include:
- A change to the Non-Concessional Contribution limit from A$180,000 p.a. back to A$100,000 (£60,680, $79,805, €67,807) p.a.
- The introduction of a $1.6m superannuation transfer balance cap on the lifetime amount of superannuation that an individual can transfer into retirement phase.
“The combination of these measures coming in led to a rush to ‘beat the 30 June deadline to get pensions transferred to Australia’, hence the need for Qrops, to fall under the pre-30 June Australian rules.
“UK pension transfers are regarded in Australia as Non-Concessional Contributions. Australia has an allowance whereby three years of NCC can be contributed at once.
“Hence, the change from A$180k p.a. back to A$100k p.a. meant that it would become much harder to simply move a UK pension fund to Australia post 30 June 2017 where the fund value was over A$300,000 and under A$540,000,” Pohl said.
Local demand
The growth in the number of Qrops in both jurisdictions is to cater to local residents, explains David White, partner at the Qrops Bureau.
“One of the exemptions to the overseas transfer charge is when the scheme being transferred to is in the same jurisdiction as the client is resident.
“Australia is one of the most popular countries for UK individuals to emigrate to. Australian pensions are established on a superannuation basis, which in most cases means that individual schemes are set up for each new member.”
He added: “In the Isle of Man, we have seen a rise in interest from advisers working with long-term Isle of Man residents who wish to transfer their UK pension into an IoM scheme. In many cases this includes transfers from defined benefit schemes.
“A small number of the Isle of Man providers offer bespoke individual schemes as opposed to master trust arrangements which may have been a contributory factor in the number of new schemes.”
Qrops headwinds
Overseas pension transfers have generated a significant amount of attention in the UK in recent months.
Not only has the Financial Conduct Authority taken steps to prevent some firms from doing overseas transfers, the UK Government in its Spring Budget imposed a 25% charge on non-EEA transfers to countries in which the pension owner does not and will not live.
Additionally, those transferring their schemes to a non-EEA country, such as Australia, but they do not then live there for at least five years, will be subject to a 25% clawback.
Drop off
Figures published by HMRC on 26 July revealed that there was a sharp drop of 29% in the number of Qrops transfers and a decrease of 19% in the overall transfer value of the pensions sent overseas in financial year 2016/17.
The decline pre-dates the 25% charge and was seen by some industry experts as a signal that the market is maturing.
A further drop is expected near year, when the impact of the Budget changes is fully felt.
