The meeting to approve the new rules, which happened on 29 September, now paves the way for the pension changes to come into effect as early as 2 October.
Roger Berry, managing director of Concept Group, said the legislation will enable Guernsey international pension plans with “overseas source funds” to reflect the access provisions of the jurisdiction of those funds.
“The most frequent enquiry is from scheme members who have UK source funds wishing to take advantage of UK flexible access.”
He added that Guernsey schemes “may choose to offer these flexibilities. However, providers that do will need to be mindful of potential changes required to their deeds and to ensure that where offering flexible access on UK funds it is done in such a way so as not to create IHT issues”.
The capacity to offer such flexibility to its current and future pension members is already proving very attractive, he also said.
Paul Forman, head of sales UK and Europe at Momentum Pensions, said he was sure that the changes announced in Guernsey followed consultation with the local industry before they were voted through.
“However, as the IHT rules are currently drafted, there now appears to be an issue around IHT being potentially liable on the death of a member of these former QROPS schemes.”
He added: “If any advisers with existing Guernsey pension clients are concerned that this change in legislation impacts any of their existing clients, then depending on their own unique circumstances, Malta QROPS might offer them an alternative IHT compliant pension solution.”
Last week, Emily Osborne, senior associate at law firm Stephenson Harwood, cited concerns around the lack of plans to change the inheritance tax definition in relation to QNUPS. She said that “if the Guernsey former QROPS allow flexi-drawdown they will not meet the QNUPS definition and potentially lose their IHT protection”.
