QROPS Tax Changes

What is the effect of these changes in the 3 main QROPS jurisdictions?

• Transfers into a Gibraltar QROPS for anyone resident in a country in the EEA will not attract the overseas transfer charge.
For individuals resident outside the EEA, a transfer to a Gibraltar QROPS will incur the 25% transfer charge.

• Transfers into a Malta QROPS for anyone resident in a country in the EEA will not attract the overseas transfer charge.
For individuals resident outside the EEA, a transfer to a Malta QROPS will incur the 25% transfer charge.

Other important notes regarding the overseas transfer charge:

• If a member’s benefits transfer successfully to a QROPS on or after 9th March 2017 without the overseas transfer charge applying due to both the individual and the QROPS meeting the relevant criteria, a back-dated tax charge could still be levied in the future if the member’s circumstances change within 5 full tax years of the transfer taking place e.g. if the member was to subsequently move to another country in that 5 year period which was outside the EEA.

• The reverse is also true in that if an overseas transfer charge was taken at the time of transfer but the member’s circumstances change within 5 full tax years of the transfer taking place, and due to the member’s new residency conditions they now meet the relevant criteria, it may be possible to reclaim the 25% tax that was lifted at the time of transfer.

• The new conditions also apply to transfers from one QROPS (or former QROPS) to another QROPS e.g. switching between jurisdictions if this is within the “relevant period” i.e. 5 full tax years from the original transfer out of the UK pension plan to the first QROPS arrangement.