UK’s tax department the HMRC has released its draft tax bill for next year, which contains a few minor tweaks including requirements for schemes to notify HMRC every five years that their scheme continues to meet the conditions to be a QROPS.

Scheme managers will also be required to report any payments made out of transfers of pension savings they have accepted from UK pension schemes, even if the scheme has stopped being a QROPS since accepting the transfer.

These relatively small changes are in contrast to last year’s draft bill, which caught New Zealand’s QROPS industry by surprise with new regulations designed to ensure the schemes were used to provide an income in retirement.

New Zealand’s QROPS schemes were suspended earlier this year while they were assessed for compliance with the new regime, which requires that only 30% of transferred funds be made available for immediate withdrawal once the age of eligibility is reached.

This was done because of concerns about New Zealand schemes being used for people pulling their money out as a lump sum.

New Zealand QROPS adviser David Milner said the imposition of these new rules on New Zealand appeared to have simply moved the problem, with those who had used this country for their activities now doing so in other countries that didn’t have the same requirements.

“They’ve set up shop elsewhere and it seems to be happening in Switzerland.”

He said this was an inevitable result of “private enterprise” and the 30/70 rule targeted at New Zealand would probably end up being applied to other countries.

New Zealand QROPS advisers have also had to contend with proposed changes to the tax treatment of pension transfers.

Sourced from http://www.goodreturns.co.nz/article/976500371/no-nasty-surprises-for-nz-qrops.html

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http://www.workandincome.govt.nz/documents/getting-united-kingdom-pensions-paid-in-nz.pdf
Sourced from http://www.workandincome.govt.nz/documents/getting-united-kingdom-pensions-paid-in-nz.pdf

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On April 6 tough new rules came into force affecting New Zealand providers of the UK pension transfer scheme, requiring 70% of the amount transferred to be used as “income for life”, meaning only 30% could be immediately withdrawn at the age of eligibility.

This created a headache for New Zealand QROPS providers, due to the near impossibility of changing their trust deeds retrospectively to introduce this requirement.

And it appears the UK authorities are taking their time deciding who is in and who is out under the new regime.

However, according to QROPS adviser David Milner of Britannia Financial Services, there are considerable delays in processing applications for non-KiwiSaver schemes.

“It takes weeks – we’ve had an application in for our new Britannia scheme for six weeks and it still hasn’t been processed,” he said.

One of the three non-KiwiSaver funds is Britannia’s NZ Endeavour Fund; Milner said the difference was it was an existing scheme rather than a new scheme, but it didn’t have any members yet.

But some in the QROPS industry appear to be slow to adapt to the new environment.

“I know one big player that is trying to amend its prospectus and trust deed but in my opinion they won’t get away with it.  The only way you can effectively do it is to close the existing scheme to new transfers and open up a new one that is compliant,” he said.

“The list comes up twice a month – there’ll either be more people on the list or there won’t be.”

Sourced from http://www.goodreturns.co.nz/article/976499564/frustrating-wait-for-qrops-providers.html

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QROPS (Qualifying Recognised Overseas Pension Schemes) allow the transfer of tax-advantaged UK pension funds to approved providers in other countries, for expat Brits who want to move their funds with them to their new home.

On April 6 new rules specifically targeting New Zealand QROPS providers kicked in, requiring those who transfer to a New Zealand provider after that date to hold 70% of the transferred amount as an “income for life”, with only 30% allowed to be withdrawn at the age of eligibility.

As reported by Good Returns, this left providers in a tough position due to New Zealand law making it difficult to make such changes to their trust deeds.

The UK tax department, HMRC, has released a revised list of QROPS providers, which appears to show the number of listed New Zealand providers has fallen from about 50 before the changes to just over 20.

However, QROPS adviser David Milner said it would be a while before an accurate picture of the new shape of New Zealand’s QROPS market could be drawn.

“It appears that all non-Kiwi Saver schemes have been temporarily removed from the QROPS list (an updated list will be published towards the end of the month) – but there are valid reasons why schemes are not on the list at the moment:

• The Scheme Manager has notified HMRC the Scheme no longer qualifies as a QROPS under the new regulations and has requested delisting
• The Scheme Manager has not yet advised HMRC that the Scheme’s trust deed has been amended to accommodate the new regulations
• Neither of the above, and the Scheme Manager is awaiting HMRC’s review of the Scheme’s rules to see if they still qualify.”

Sourced from http://www.goodreturns.co.nz/article/976499512/qrops-picture-still-murky.html

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