Guernsey finance industry resists HMRC Qrops reforms

Guernsey Finance has backed the island’s plans to resist HMRC rules which would mean residents and non-residents within any Qrops scheme would be taxed equally.

In December, HMRC launched an eight week consultation on draft legislation which will alter overseas pension regulations. The new legislation, if enacted, will take effect from April 6 this year.

Guernsey Finance is a promotional agency for the island’s finance industry. Chief executive Peter Niven says: “Most of HMRC’s proposals are directed towards eliminating abuse in parts of the overseas pensions system and this is an aspiration which Guernsey fully supports.

“However, there is a feeling that the new Condition 4 unintentionally runs counter to those objectives by having the greatest adverse impact on those cooperative and compliant jurisdictions, such as Guernsey.

“HMRC’s focus in this regard is also surprising because Qrops are designed for pensioners who have permanently left the UK and typically tax is only liable in the pensioner’s country of residence.

“Therefore, with currently no tax liable for payment in the UK and the expectation of this remaining the same under the proposed new regime, so there will continue to be a net nil benefit to its exchequer.”