Guernsey QROPS firms say they can offer lump sums above 30%

Guernsey QROPS providers have claimed they can offer similar benefits as available under the Isle of Man’s new pension legislation, including tax-free lump sums in excess of 30%.

Some pension companies in the island, reckoned to be the current leading QROPS jurisdiction, have gone on the offensive since details of the Isle of Man’s new 50c pension legislation was released.

In particular, a scheme offered by Isle of Man actuary and pension trustee Boal & Co, offering potential lump sums in excess of 30%, has received much attention and led to criticism from rival firms, some of whom believe promoting such benefits is irresponsible and may lead to HMRC intervention.

Roger Berry, managing director of Guernsey QROPS provider CGL and chairman of local pension body’s QROPS committee, said: “50c legislation is effectively an exemption provision and is very similar to Guernsey’s 40ee exemption provision, which has been around for very many years.

“Guernsey then, has the capacity to do similar things to that being promoted by the Isle of Man. I would suggest that it should be used for the exceptional circumstance rather than generally…..

“Frequently, review by HMRC follows [the promotion of such schemes] with the potential to lose ‘approval’ of said schemes and all the difficulties for advisers and members that result.”

He added Guernsey’s Tax Office had confirmed that as long as the “correct structuring” was inserted into a scheme’s deed rules, Guernsey QROPS could do “similar things” to Manx 50C pensions.

Boal & Co declined to comment. Despite the widespread consternation among some QROPS providers in Guernsey and elsewhere as a result of the Trinity scheme and 50c legislation, at least one high-profile Channel Islands provider is known to be planning to launch a Manx scheme offering similar benefits to Boal & Co’s.

For expert QROPS advice go to http://www.qrops-advisers.com or call 01664 444625

http://www.international-adviser.com/article/guernsey-qrops-firms-say-they-can-offer-lump-sums-above-30