There has been a lot of talk about Brexit triggering the end of QROPS, what is your take on this?
Whilst Brexit may impact on some elements of the QROPS legislation this won’t impact all QROPS packages. This is because there are QROPS solutions that sit outside the EU. For example, at Momentum, we offer schemes both within the EU (Malta & UK) and outside (Gibraltar & Isle of Man).
Malta remains a full member of the EU with effective Pensions legislation meeting the HMRC ROPS requirements. The majority of ROPS jurisdictions are already outside the EU. For example, Australia, New Zealand, Gibraltar, and the Isle of Man. As an ex-Crown Dependency, it is difficult to foresee that there would be any negative implications for Malta as a ROPS jurisdiction, due to the strength of its legislation and regulation.
Gibraltar is an existing Non-EU territory. Schemes remain within HMRC ROPS requirements. Of more relevance may be its ability as a jurisdiction to trade with the remainder of the EU, but in relation to Pension Schemes, these should not be affected. The Withholding Tax regime is already in place, having already been subject to HMRC scrutiny.
We believe that the UK remains an attractive jurisdiction for both UK and non-UK Residents. SIPPS remain a good and flexible retirement vehicle for both residents and non-residents. We don’t see this changing with Brexit. We also envisage that Flexible Drawdown will remain in place.
How do you see QROPS evolving in 2017?
This isn’t the first time there has been market panic about the ‘end’ of QROPS. The death of the QROPS market has been prematurely called before. The first time was in 2012. This happened again in 2015 with the previous legislation changes from HMRC.
However, even with the current draft changes that are expected to come into force from 6th April 2017, I expect that the QROPS market will continue to grow and evolve. We might see more interaction with UK SIPPs for expats who have not been offshore for 10 years.
This is why, at Momentum Pensions, we are offering a free transfer to QROPS for our UK SIPP members. These schemes could work in tandem to ensure that the client has the most suitable pension vehicle to provide for their needs in retirement.
Will we see less of a need for QROPS with Brexit potentially reducing the number of UK expats in Europe?
The latest statistics from June show that 315,000 people emigrated, of which 127,000 were UK nationals. Even with the uncertainty of Brexit, the popularity of retiring abroad doesn’t look to be slowing down. Given the benefits of a QROPS, even with the qualifying time period increasing from 5-years to 10-years, I believe we will continue to see many pension transfers in the years to come.
How is Momentum preparing for any potential legislation changes around QROPS?
As a multi-jurisdictional provider of both UK and international pensions solutions we feel that we are equipped to deal with the proposed 2017 pension changes.
We are committed to providing the most flexible and innovative solutions so that members are not penalised for any changes in their circumstances or those of the prevailing Pensions rules and regulations.
What would you say to anyone hesitating about transferring their pension?
Samuel Becket famously once said that ‘the only certainties in life are death and taxes’. I would add another certainty to that list; that Pensions go hand in hand with constant change!
We would suggest that any clients considering a pension transfer should consult a qualified adviser now, as far in advance as possible of the changes proposed for April 2017, to ensure that they get the most up to date advice relating to their personal circumstances.
We now know with certainty what the rules and regulations look like today and in 2017 but there is no guarantee that these will not change again in the near future.
