The Personal Finance Society is warning that advisers who do not specialise in qualifying recognised overseas pension schemes should refer clients elsewhere following the introd- uction of Qrops legislation.
The PFS has issued a factsheet to its members explaining the rules on transferring pension rights from UK-registered schemes to a Qrops.
It says changes introduced by the Finance Act 2004 mean that while there are now less restrictive rules on transferring pension rights overseas, the treatment of funds post-transfer are more restrictive.
PFS chief executive Fay Goddard says: “The Qrops legislation provides opportunities for advisers and their clients but advising on Qrops requires a specialised level of knowledge. We would not anticipate all advisers being in a position to advise in this specialist area. Non-expert advisers should refer any clients to a Qrops specialist.”
Offshore Qrops managing director Garaint Davies says advisers without a thorough knowledge of offshore tax systems should not be advising on Qrops.
He says: “This is the most dangerous sort of advice you can be giving. In Australia, New Zealand and Canada, UK pensions that are transferred over become taxable vehicles. Advisers that don’t specialise in this area should refer their clients to an adviser who knows how the funds will be treated in various places.”