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Fears over Gibraltar QROPS status calmed by last minute government session
| Published: | 7 Apr at 6 PM |
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Fears the status of Gibraltar as a QROPS jurisdiction would be threatened by UK law changes were put to rest at the last minute by a governmental fine-tuning session.
Serious concerns in the financial world over risks to the Rock’s QROPS status as a result of new UK rules redefining offshore pension laws were finally quashed on March 31, just five days before the UK deadline for registration of offshore QROPS as compliant with the changes. According to Gibraltar’s Minister of Commerce Albert Isola, the laws were passed just in time to ensure the continuation of the popular QROPS destination.
Introduction of the new laws, he said, will ensure Gibraltar still holds its reputation for the highest possible standards of pension regulation and its leading position as a recognised QROPS jurisdiction. Following a discussion with UK financial authorities, he added, Gibraltar will not bring in flexible access, but will continue with its current arrangement whereby members of QROPS schemes will need to ring-fence 70 per cent of total funds in order to ensure a pension income for life.
As regards the tax rate levied on pension benefits taken from the retained amounts, this will not change from its current level of 2.5 per cent. Isola also confirmed the recently announced 25 per cent transfer tax will not be applied to expats residing in the European Economic Area (EEA) should they wish to move their pensions to a Gibraltar QROPS. Due to the new transfer chargem he expects changes in the numbers of those deciding to move their pension to an offshore jurisdiction.
Gibraltar will now be seen as an EEA country as regards the transfer charge, meaning the Rock will still be able to offer QROPS to expats living in EEA states. Even although flexible access will be a thing of the past, pensioners living in Europe will not be charged as long as they stay in their present country of residence for five years from the transfer date, along with the pension fund itself.
Serious concerns in the financial world over risks to the Rock’s QROPS status as a result of new UK rules redefining offshore pension laws were finally quashed on March 31, just five days before the UK deadline for registration of offshore QROPS as compliant with the changes. According to Gibraltar’s Minister of Commerce Albert Isola, the laws were passed just in time to ensure the continuation of the popular QROPS destination.
Introduction of the new laws, he said, will ensure Gibraltar still holds its reputation for the highest possible standards of pension regulation and its leading position as a recognised QROPS jurisdiction. Following a discussion with UK financial authorities, he added, Gibraltar will not bring in flexible access, but will continue with its current arrangement whereby members of QROPS schemes will need to ring-fence 70 per cent of total funds in order to ensure a pension income for life.
As regards the tax rate levied on pension benefits taken from the retained amounts, this will not change from its current level of 2.5 per cent. Isola also confirmed the recently announced 25 per cent transfer tax will not be applied to expats residing in the European Economic Area (EEA) should they wish to move their pensions to a Gibraltar QROPS. Due to the new transfer chargem he expects changes in the numbers of those deciding to move their pension to an offshore jurisdiction.
Gibraltar will now be seen as an EEA country as regards the transfer charge, meaning the Rock will still be able to offer QROPS to expats living in EEA states. Even although flexible access will be a thing of the past, pensioners living in Europe will not be charged as long as they stay in their present country of residence for five years from the transfer date, along with the pension fund itself.
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