Now having gone through The Overseas Pension Schemes (Miscellaneous Amendments) regulations 2012 in detail.

This looks on face value to stop 100% encashment via New Zealand which is mentioned by name. But we know of a scheme in Latvia who will allow 100% encashment, and I am sure that there are more.

However the clause that a QROPS must be recognised for tax purposes in their country of establishment, may stop jurisdictions like Latvia being used.

What it does do is clarify the situation where a client claims to be an innocent party to a breach of the rules. As from April 2012 they will be asked to sign that they understand that if their transfer gives rise to a liability under section 208 (unauthorised payments charge) that a surcharge may be levied.

For more information on this, or general advice on QROPS contact me via our website:

http://www.waterstone-investment-associates.com/

I cannot help but wonder, if the breaking of the spirit of the law has resulted in the draft legislation for the Finance Act 2012, what will happen if this continues. 

The time limits that are included in the current and proposed legislation of 5 and/or 10 years apply to the AUTOMATIC requirement for the QROPS trustee to report to the HMRC.  However, HMRC have the right to audit a QROPS transfer at ANY time.

The new legislation for QROPS has now been issued and will be implemented from 6th April 2012.  In essence, the legislation has cracked down on trying to “pension” bust a QROPS.  The law now is clearer than it has been

          10 year automatic reporting requirement from date of TRANSFER
         
          Minimum of 70% of the fund value to be used to provide income.  (Note, the HMRC does not allow the taking of 100% of the fund)

          The ability to have a 100% spouse´s pension is maintained

          A QROPS is still very useful as a pension

If you have moved overseas or are moving overseas and you have a UK pension you should get qualified and regulated advice about QROPS.

Other than the fallout that has been felt in Guernsey. Nothing has really changed other that the 100% cash abuse will stop. The good news is finally the unqualified masquerading as financial advisers will also pack up and go home.

Our advice remains the same only undertake a QROPS transfer after taking G60 qualified advice, and this advice is backed up by a TVA (Transfer value analysis). Without this report you cannot compare the fee structure of the QROPS to that of your UK scheme.

Increasingly QROPS Trustees are asking for a copy of the TVA report before they will accept an application.

For further information on a TVA can be found on our company site:

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