It may be several more weeks before it becomes clear how tough new regulations on UK pension transfers have affected New Zealand’s QROPS market.
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provider after that date to hold 70% of the transferred amount as an “income for life”, with only 30% allowed to be withdrawn at the age of eligibility.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.”