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.
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