QROPS ADVICE: Trouble QROPS up for NZ but Gib gets the OK

Gibraltar has been given the green light by the UK as a QROPS domicile after agreeing to revise its pen-sion legislation.
Its long-awaited stamp of approval follows high-level talks between Treasury offi-cials and the territory's chief minister Peter Caruana, sources said. Details of the deal were not immediately available but it is believed it will involve a change to Gibraltar's pension law.
Since the middle of last year, Gibraltar trustees of QROPS have voluntarily suspended pension trans-fers from the UK, pend-ing resolution of HMRC's concerns.
The territory taxes the pension income of people over 60 at 0%, and it is this provision that was the focus of HMRC's concern.
The Gibraltar move comes amid growing unease at schemes in New Zealand offering 100% encashment. The country is now believed to be under new scrutiny as a suit-able home for UK pensions as schemes offering 100% encashment have rung alarm bells within HMRC. This has raised speculation that the country may follow Singapore in being barred as a QROPS domicile.
Pension trustees in other jurisdictions have been receiving increasing requests for transfers from their own schemes to New Zealand, in some cases with advisers specifically stating the intention is for their client to cash-in 100% of their pension.
Such actions fly in the face of the UK's stance on overseas pensions. Although transfers can be made to jurisdictions where benefits are taxed and paid in varying ways, an over-riding principle is that any egy, suffering from lower yields and costly voids."
George Hankinson, managing director of LCP, added prices were likely to climb again soon, particu-larly as foreign investors return to the market.
The cost of the fund's gearing is 1% over the Bank of England base rate, a financing levy few private
Projected fund returns
350
pension savings are to be used in retirement.
New Zealand has a far less prescriptive pension framework than the UK and some schemes allow 100% commutation from age 18. For advisers, trans-acting such business can be lucrative. Some charge clients up to $600 per transfer plus fees in excess of 7% when the commuta-tion is completed.
HMRC declined to com-ment on any probe but industry sources have con-firmed they have supplied it with information on New Zealand schemes fol-lowing requests. In 2008, investors would be able to attain on a mortgage.
The fund has a mini-mum investment of £50,000 and adviser commission is available.
It is eligible for SIPP, SSAS, PEP and ISA inves-
tors, and offshore inves-tors who qualify for capital gains and inheritance tax exemptions.
all Singapore pensions were stripped of QROPS approval after HMRC found some were promot-ing 'pension-busting'.
Roger Berry, manag-ing director of Guernsey QROPS provider Concept Group, said: "The last thing we wish to see is a repeat of the Singapore loss of approval. This caused great difficulty for those involved and suppressed the market by creating doubt in the minds of those contemplat-ing transfers."
In another development, Malta last month received approval from HMRC as a
QROPS domicile.
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