£500m transferred to Qrops

Bell: ‘Penal tax charges encourage distortive behaviour’
Bell: ‘Penal tax charges encourage distortive behaviour’

Almost £500m of UK pension funds were transferred to qualifying recognised overseas pension schemes in the first two years after A-Day, according to figures obtained by AJ Bell.

Figures released as part of a Freedom of Information request recorded over 7,300 transfers to Qrops in the period, more than three times the 2,320 clients who entered alternatively secured pensions.

Chief executive Andy Bell says: “These figures support our campaign for a change in the 82 per cent tax penalty applied on death in Asp.

“The introduction of this tax penalty in April 2007 resulted in a 154 per cent increase in the amount transferred to Qrops compared with the previous year. This is proof that penal tax charges only serve to encourage distortive behaviour at a significant cost to the Exchequer.”

“This is only one of the steps being taken to escape this tax charge -the few who can afford to simply move offshore or pay the fees associated with the available onshore structures.”

Global Qrops director Paul Davies says: “I do not think that people are transferring to Qrops solely to get around the tax on Asp but, in terms of long-term planning for beneficiaries in retirement, it does make sense.”