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Callum Beausire

Pensions Made Easy #6 – Can a UK resident benefit from a QNUPS?

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An article by Roger Berry, Managing Director of Concept Group Limited.

Potentially they can.

A Guernsey QNUPS will be a local, approved and regulated pension scheme. Whilst it pays benefits gross without the deduction of Guernsey tax a UK resident member will be exposed to UK income tax on benefits received. Whilst typical QNUPS have underlying investments of marketable securities and portfolios, they can, unlike a QROPS, better invest into assets such as residential property, vintage cars, stamps, wine, jewellery etc. Structuring of QNUPS can be a complex matter requiring professional tax advice, but with care QNUPS can be a useful way for UK residents to add to their savings for retirement and potentially benefit from exemptions to IHT.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and or any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct. Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #5 – Am I stuck in a QROPS, can I get out?

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An article by Roger Berry, Managing Director of Concept Group Limited.

For members in a current QROPS i.e Maltese or Gibraltar QROPS, it is possible to transfer out to a Guernsey QNUPs or delisted QROPS to achieve greater flexibility on investments and tax benefits but certain criteria needs to be met.

  1. Original transfer to existing QROPS was pre April 2017
  2. Members must be aged 55 or older
  3. Members must be non-resident from the UK for more than 5 UK tax years.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #4 – What are the advantages of being a member of a QNUPS or a Guernsey QROPS delisted in 2012?

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An article by Roger Berry, Managing Director of Concept Group Limited.

  • No ongoing reporting to HMRC
  • Benefits are paid gross out of Guernsey, irrespective of country of residence of the member, no reliance on tax agreements, as in Malta and no 2.5% tax as in Gibraltar
  • 30% Pension Commencement Lump Sum (“PCLS”) can be taken
  • Loans may be given to members
  • Wide investment choice, e.g. not restricted as in Malta
  • Flexible Access to lump sums possible, not available in Gibraltar
  • Flexible benefits options, drawdown and annuities
  • Designed to meet QNUPS requirements and therefore potentially exempt from IHT
  • Death benefits paid out gross of tax in Guernsey
  • Capable of receiving transfers in from other delisted QROPS and current QROPS if certain criteria is met
  • Contributions can be made to the scheme.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #3 – Is a member of a delisted QROPS disadvantaged by not being in a current QROPS?

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An article by Roger Berry, Managing Director of Concept Group Limited.

Generally no, because once your pension transfer has occurred from a UK scheme to a QROPS you have achieved the main goal of moving your pension assets out of the UK. The one disadvantage of a delisted scheme is that it cannot receive a transfer directly from a UK registered pension scheme. None the less, members of a delisted scheme who have already transferred their UK pension across may be in a very similar position to members of a current QROPS, and not worse off. They may actually be better off.

It is perhaps odd to think that being a member of a delisted QROPS might be better than being in a current QROPS, but that can be the case. QROPS have been delisted for many reasons, some not good, so some delisted schemes are considered by HMRC never to have been a QROPS and in such circumstances HMRC can seek to levy significant taxes. However many delisted QROPS have chosen to delist or were delisted as a result of changing UK legislation. In those circumstances, HMRC is usually not claiming that the scheme was not a QROPS previously so member’s death benefits are maintained.

Significant changes to HMRC QROPS legislation occurred in 2012 and as a result, inter alia, most Guernsey QROP schemes were delisted. Quite possibly because the advantages of the Guernsey QROPS were perceived to be too good from a UK perspective. Whilst Guernsey can only accept new transfers to QROPS for Guernsey resident members, members in Guernsey QROPS that were delisted in 2012 have the benefit of having their position effectively grandfathered by HMRC, maintaining a very favourable position not generally achievable in current QROPS.

“If a pension scheme that is a QROPS on 5th April 2012 no longer meets the conditions to be a QROPS on 6th April 2012, members of that pension scheme who have already transferred their pension savings will be able to remain as members and receive a pension paid from the sums transferred without incurring additional tax charges.” – HMRC Pensions Manual at the time.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #2 – What is a Delisted QROPS?

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An article by Roger Berry, Managing Director of Concept Group Limited.

Delisted QROPS are schemes that have been delisted by HMRC at the request of the scheme administrator or by HMRC and may still carry reporting requirements to HMRC and restrictions on investments, the exceptions are schemes that were delisted in early 2012, or before, which no longer have reporting requirements

Schemes delisted by HMRC may never have met the Recognised Overseas Pension Scheme (“ROPS”) requirements and members of such schemes may have tax issues to resolve with HMRC. This contrasts with schemes that choose to delist or nor longer meet new ROPS requirements. These delsited schemes may be advantageous for members. Delisted QROPS are usually a Overseas Pension Scheme (“OPS”) i.e. lacking in Q (“Qualification”) and R (“Recognition”). If they contain UK tax relieved funds they are also Relevant Non-UK Pension Schemes (“RNUKS”).

Any scheme that is a RNUKS can fall within the application of certain UK tax charges, despite the member no longer being resident in the UK, and even if the scheme has been delisted.

These charges may be completely avoided if the transfer to the QROPS was pre April 2017 and the member has been non-UK resident for more than 5 complete UK tax years.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #1 – What is the difference between a QROPS and a QNUPS?

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An article by Roger Berry, Managing Director of Concept Group Limited.

People use QROPS to transfer UK tax relieved pension funds overseas. QROPS are generally for non-UK resident members or for people who intend to be UK non-resident in the near future. QROPS have restrictions on investing in taxable property e.g. wine, stamps, vintage cars, residential property but QNUPS do not. QNUPS are often used both by UK resident and UK non-resident members. You cannot transfer UK tax releived pensions into a QNUPS without creating very significant tax charges. Only a QROPS can achieve a tax free transfer.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have further any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and noting in this article should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of his article.

The information in this document is based on our undertanding of current laws and practices, both of which are subject to change. Whilst every effort has been made o ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey Law, 2000 and are regulated by the Guernsey Financial Services Commission.

UK Pension Scam Industry Group relea­­­­ses new updated Code

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Roger Berry FCCA, Managing Director of Concept Group Limited comments: ­­­

Pension administrators faced with dubious transfer requests have long had concerns for their members over pension liberation, but they now need to be mindful of an increasingly sophisticated environment involving scam investments, commission swindles and other dishonest behaviour.

This sophistication requires pension administrators to respond, in order to protect their members.

The release of the new code, with amongst other things – up to date guidance, case studies and checklists, is a centralised resource to assist pension administrators.   We are delighted to have been one of the authors of the new updated code that provides helps to industry.  Although the code is UK centric it has great relevance and contains good practice for offshore pension trustees and administrators to consider.

Version 2.0 of the Code is now available to download from the PSIG website.

Flexible Access Drawdown update – October 2017

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Further to our previous news article on 1st October 2015 where we first discussed the options available for Guernsey pension members, this update discusses the pragmatics of Guernsey Flexible Access after 2 years of practice, and further in  Guernsey legislation (pension regulation).

Which Guernsey pensions can have access?

The 2015 legislation provided for members of s.40 and s.157A pensions to consider their options for flexible access with respect to the legislation of the jurisdiction which sourced their pension funds.

So, if your pension originally accrued in Denmark, it would be the flexibilities of Danish pension legislation you would consider.  If from the UK, the UK flexibilities would apply.

Thus pensions that are or were a QROPS, with UK source funds in them would have the option of flexible access drawdown.

Options for Guernsey Delisted QROPS

For delisted Guernsey QROPS, which are now OPS, this offers the ability to take partial or full access if the scheme of which you are a member, provide this service.

It should be noted that not all providers offer flexible access, and members should carefully consider their options and take appropriate advice because Guernsey delisted QROPS have grand fathered benefits by HMRC.

Frequent misleading facts and red herrings, 55% tax charges and IHT issues, the 70% rule

If you meet the criteria laid out under, you can avoid tax issues particularly the 55% tax on unauthorised payments. Due to changes in pension legislation in Guernsey, the IHT issue requires less mitigation, although you may still need to transfer to a separate pension plan to achieve flexible access.

The 70% rule is often also a red herring, Delisted QROPS lost ‘membership’ of QROPS status so they have no reporting and the undertakings given to HMRC such as the 70% rule, strictly speaking are not binding. The introduction of pension regulation at scheme level in Guernsey also assists.

Tax Implications

This news release is provided for general purposes and does not constitute tax advice.

Concept shall not be held responsible for any liability or loss which may arise directly or indirectly from any reliance placed upon the on information contained in this document.

Although flexible access is paid out gross. Taxes may be due in the country of residence of the member. Taxes may be due the UK, although as a general rule, those non-resident of the UK for more than 5 UK tax years may be outside the application of certain UK tax charges and the unauthorised payment regime.

There are exceptions so tax advice should be taken. As a simple rule if you are aged 55 or over and you have been out of the UK more than 5 UK tax years, full or partial flexible access is worthy of consideration.

No Guernsey tax is deducted if you are not resident in Guernsey.

My Scheme doesn’t offer flexible access?

If the scheme you are in does not offer flexible access you may consider transfers to schemes which do.

It is possible to transfer from one Guernsey Delisted scheme to another and from other schemes in other jurisdictions, to a Guernsey plan.

What criteria do I need to meet to transfer?

Transfers from other schemes, including QROPS in other jurisdictions are possible. If you are under age 55, UK resident or have been UK resident in any of the last 5 full UK tax years, transfer may not be in your interest, or be acceptable to your existing scheme.

This is a very broad overview, other criteria exists, not least further changes introduced by the UK Finance Act 2017 which apply to transfers since March 2017.

Why would I consider a transfer to a Guernsey Scheme?

Members consider transfers for a variety of reasons, costs, service, tax benefits or stability of jurisdiction to name some.

Whilst other jurisdictions can pay flexible benefit, it may be that the jurisdiction in which the members reside does not benefit from tax agreements in place and thus significant taxes may arise.
As payment of benefits are generally made gross from Guernsey schemes there is often no need to consider tax agreements irrespective of where the members is living or will live. This is a significant benefit and a reason members frequently seek a transfer to Guernsey.

In addition, members of Guernsey schemes may prefer to have the certainty that whenever a member becomes resident, (assuming that is not Guernsey) benefits will be paid gross.

Guernsey pension legislation also offers in certain circumstances other flexibilities, including the possibility to invest in property and other non- standard assets and the ability to take loans from the scheme.

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