As you may be aware there were a number of announcements regarding pension flexibility within the recent UK Budget Announcement 2014, and HMRC acknowledged that several of these will have a knock on impact into the overseas market. Whilst those changes are substantially now in Law, the overseas elements are detailed in draft instruments released just prior to Christmas.

From April 2015 changes to UK registered pension schemes will permit an individual full access to their pension fund once they reach the age of 55, on the basis that all funds received (following the withdrawal of their pension commencement lump sum which will remain free of UK tax, subject to lifetime allowances) will be subject to UK income tax. HMRC has by way of draft statutory instrument indicated that any QROPS jurisdiction could permit similar flexibilities as the rule requiring that 70% of the pension fund value is used to provide the member with an income for life (in the draft instruments) is being removed.  We await the detail from various QROPS jurisdictions, including Guernsey and Gibraltar, on if and how flexibility may be offered.

Our current schemes in Guernsey are approved under the Income Tax (Guernsey) Law (s.157A), while our Gibraltarian schemes are approved under the Income Tax Act 2010 (s.14A) in Gibraltar, with all of the schemes being governed by way of multi-member trust deeds. Thus a change in UK legislation is not the only factor that needs to be taken into consideration.  There are ongoing discussions in Guernsey and Gibraltar and we will of course keep members and their advisers updated as things develop.