Draft Regulations have been published for comments. It is proposed that the consultation will finish on 30 January, 2012 and the new measures will apply after 6th April, 2012. The changes are significant and include:
- Measures to stop QROPS transferred assets from being turned into tax free lump sums;
- Providing HMRC with information for 10 years rather than having to decide whether the QROPS member is or was a UK resident at any time in the previous 10 years;
- Supplying this information within 60 days of payment rather than after the end of the tax year;
- A new requirement for a member requesting a transfer to a QROPS to provide personal information to the registered pension scheme and for the scheme to check that information and send it to HMRC within 30 days of the transfer taking place;
- Changes to the conditions that overseas funds must meet in order to become a QROPS, but with special provisions for Kiwi Saver.
The intent of the UK authorities appears to be to stop QROPS transfers that are motivated by a desire to reduce or escape taxation on pension savings and also to ensure benefits end up in an income stream format. This is understandable when the actions of various Channel Island tax agreements are considered. What is less clear is the impact on people moving to Australia. It is a massive tax advantage to these individuals to receive tax concessions during the accumulation phase in the UK and then tax free benefits in Australia during the post retirement phase.
NetActuary does not provide QROPS services. We focus on computational tasks needed to evaluate retirement planning strategies to ensure optimal outcomes.
The NetActuary Team