On October 27, Guernsey tax authorities issued a letter to all Guernsey-based Qrops providers, outlining the official regulations for new and existing schemes after extensive discussions with HM Revenue and Customs.
Tax specialist Baker Tilly believes wider changes to Qrops regulation are likely to be announced over the next few days.
Guernsey has stipulated that a lump sum payment restriction of 25 per cent of the fund must apply to residents and non-residents. It is also understood to have tightened the transfer of funds held by non-residents with UK approved pension funds to schemes outside of Guernsey. In such cases, these schemes must have Qrops’ approval or have provisions in respect of benefits that are no more generous than the scheme transferring the funds.
Baker Tilly says the restrictions are only intended to apply to new members admitted to schemes and to all members of new schemes approved after October 27. Head of tax George Bull says: “I cannot imagine that Guernsey will have done this believing they will be the only ones to make the change. Over the next few days and months we may see other countries saying they will toe this line as well.”
Concept Group managing director Roger Berry says: “I think everyone, including HMRC, has been surprised by the level of interest in Qrops and this could well lead to other changes in other jurisdictions and from HMRC. We will be watching the pre-Budget report with interest.”
An HMRC spokesman says: “HMRC continues to monitor transfers to Qrops closely and will act proportionately and appropriately should it become clear that the system is open to abuse.”