Client adviser Paul Davies says schemes and jurisdictions that set up Qrops have become pro-active with the realisation that the Revenue is going to continue its probe.
He says: “Guernsey is being quite proactive in making sure they follow the Revenue’s reporting requirements almost to the letter and beyond so there is little doubt that their schemes are there to produce retirement benefits as opposed to any other.”
Qrops have generated a lot of interest among expatriates since their launch in 2006 but the Revenue is expected to clamp down heavily on the schemes as more Britons with large pension pots move abroad to avoid tax on their income.
In last week’s Money Marketing, Skandia International warned advisers that client suitability issues around Qrops could create misselling problems. Skandia does not offer a direct Qrops solution for retail investors but says it is watching market developments. Its collective bond and executive bond can be used as an investment wrapper within a Qrops.
Marketing manager Phil Oxenham says: “The main concern would be around client suitability. Given the myriad of legislation, some still evolving, across a number of different jurisdictions, advisers must exercise caution to ensure that their recommendations are appropriate.”
AES International managing director Sam Instone says: “Everyone involved with Qrops is aware that the current situation could potentially lead to another pension misselling scandal.
“One key cause is third country schemes and life companies have chosen to distribute/accept transfers through completely unqualified, unregulated and uninsured advisers outside of the UK.
“In the absence of any possible recourse against these adv-isers, the trustees and/or providers will have to be held directly accountable when this bubble bursts.”