Guernsey’s income tax office says HMRC plans to exclude Qrops which provide pensions to residents outside the country from its list of approved providers.
HMRC’s final Qrops rules, published last month, require Qrops providers to treat non-residents and residents of a jurisdiction in the same way for tax purposes from April 6.
Guernsey had hoped it could continue to offer pensions to non-residents after it introduced new 157E legislation designed to meet the Revenue’s new requirements.
However, a note issued by Guernsey’s income tax office says: “HMRC’s list of approved Qrops, to be published next on April 12, 2012, will only include a Guernsey scheme if HMRC is satisfied that the scheme is ‘residents-only’.
“HMRC indicates that it will seek to revise its regulations further in order to disqualify 157E schemes from Qrops listings.”
It is unclear how HMRC will treat other Qrops jurisdictions.
Guernsey Association of Pension Providers president Stephen Ainsworth says: “We have worked very closely with the Guernsey Income Tax Office and with senior politicians to create a flexible but robust pensions system which not only meets the needs of Guernsey residents but which meets the requirements of HMRC for Qrops transfers.
“Accordingly it is frustrating that HMRC, having set out its detailed rules, then seeks to set them aside without notice in order to meet an unpublished policy objective.
“It is also concerning that, despite advice given by GAPP and others in their response to the consultation on the April regulations, HMRC has not recognised the many reasons why it may be entirely appropriate for Guernsey pension schemes to be open to non Guernsey members.”
Earlier this month, Isle of Man provider Boal & Co de-registered its ’Trinity’ Qrops after the island failed to adapt its pension rules to meet the new HMRC requirements.
A HMRC spokesman says: “From April 6, 2012 one of the conditions a pension scheme must meet to be a Qrops is that if there is a tax relief for non-residents on benefits paid from a pension scheme then the same, or substantially the same, tax relief must be available to residents. This is known as the benefits tax relief test.
“A pension scheme that can have only residents as members will meet the benefits tax relief test. Pension schemes will need to meet the new conditions to be a Qrops.
“If a pension scheme that was a Qrops on April 5, 2012 no longer meets the conditions to be a Qrops, members of the pension scheme will be able to remain as members and receive a pension paid from the sums transferred without incurring member payment charges.”