However, other countries may soon be targeted by similar regulations to those foisted on New Zealand, which seem to have simply shifted the conduct targeted by the UK regulator elsewhere.
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.