Pension provider Boal & Co will temporarily de-register its Trinity Qrops after it became clear the Isle of Man will fail to adapt its 50c legislation in time for the HM Revenue & Customs deadline next month.
Final rules published by HMRC, which will come into force on April 6, include requirements for Qrops providers to treat non-residents and residents of a jurisdiction in the same way for tax purposes.
The 50c schemes fall foul of this rule because they pay benefits to non-residents tax-free while residents are taxed.
Boal & Co managing director Gary Boal says all Isle of Man 50c schemes will now have to de-register as Qrops from April 6, although the ’Trinity’ scheme will de-register from April 4. He expects the island to adapt its 50c tax code to comply with the new Qrops rules in the next few months.
He says: “We have been forced to temporarily de-register our 50c Qrops schemes. That is because we now know for certain that from April 6, 50c will no longer pass the new Qrops test.
“This will have no implications for existing members.
“I am extremely frustrated that the Isle of Man has not got its act together quickly enough to prevent this happening.”
Association of Pension Scheme Providers deputy chairman Mark Kiernan says: “The Isle of Man finds itself in an unusual situation. The amendments which are required to make 50c meet the new HMRC regulations are minimal in nature, however some of the budget announcements made by HMRC have potentially serious undertones attached to them.
“Undoubtedly there will be a pause in service whilst we wait for clarity on these issues.”