New deadlines
The three specific deadlines start from 9 March, where any transfers outside the exemptions will be subject to the 25% tax charge.
According to international pension transfer firm IPTspecialists, the second deadline of 6 April will apply to transfers to Qrops on or after 6 April 2017 where if benefits are taken within five years of the date of transfer then UK tax rules will apply, irrespective of how long the member has been non-UK tax resident.
A third deadline kicks in on 13 April 2017, when any Qrops scheme must formally confirm to HMRC that it will operate the overseas transfer charge, otherwise it ceases to qualify.
Middle East impact
As Mark Sanderson, director of pensions at Praemium said: “This could have a major impact on Qrops markets like the Middle East where Malta is a popular jurisdiction for pension planning. Gibraltar is a popular jurisdiction in Asia and Africa and they will see a similar impact.
“Added to this is the threat of the tax charge hangs around for five years after the point of transfer like the sword of Damocles. So if a member is EEA resident at the point of transfer to an EEA based Qrops but then moves to a country outside the EEA within five years of the transfer, the charge will be levied retrospectively,” he said.
So while there will still be advantages to using Qrops in spite of the overseas transfer charge, it is clear that the traditional use of Qrops for pension tax planning will need to be rethought.
