View more on these topics

Fears that new rules could be start of wider crackdown

Monfort International managing director Geraint Davies says new Qrops rules could lead to a widespread crackdown on abuse of the pension schemes.

Last week, HM Revenue & Customs published Qrops rules which require schemes to report all payments to members for 10 years after they join. They also require schemes to report the payout of any benefits to HMRC in writing within 90 days rather than annual electronic reporting.

Davies says the new rules open up all Qrops to the scrutiny of the revenue.

He says: “This is a forerunner to a widespread investigation of Qrops and a crackdown on abuse. HMRC will want to stop people using these schemes to get their hands on some cash.”

The rules, which come into force on April 6, clarify that Qrops members will be able to take a tax-free lump sum as long as 70 per cent of the cash transferred into the scheme is ringfenced for retirement income.

Davies says the rules mean that Qrops essentially have to behave like a UK scheme, unless the member is not resident in the UK for five years, in which case they can decide for their scheme to run along local rules.

Davies says: “Any scheme that had money go into it after April 6, 2006 will have to account for all benefit payments.

“If the correct amount of money is not there, HMRC is going to want to know why.”

Recommended

10

Aviva predicts over 75% of market could be restricted

Aviva predicts the proportion of advisers providing independent advice is set to fall dramatically post-RDR with IFAs accounting for just 13 per cent of the market by 2015. Speaking at the Marketforce Impact of the RDR conference in London this week, Aviva RDR implementation manager Ross Anderson set out Aviva’s forecasts on how distribution will […]

Non-dom loophole shut on offshore bond gains

The Government has moved to close a loophole which allowed people with offshore bonds who live outside the UK to avoid paying tax on investment gains. Budget documents published last week contain details of a clampdown on gains arising in offshore bonds for non-domiciled individuals being used to offset gains when they become a chargeable […]

When will US rates rise?

By Felix Wintle, Investment Director & Head of US Equities The most recent communication from Federal Reserve chair Janet Yellen has put the market’s sights on September as the most likely month for the first rate rise. This is due to the stronger than expected economic data of late, particularly in employment and housing, which […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment