Industry relief, as first post-suspension ROPS list published
A collective sigh of relief was almost audible today a little after noon, London time, when HMRC finally published its eagerly-anticipated, first post-suspension list of overseas pension schemes to which UK pensions may be transferred.
Few major changes were immediately obvious, according to a number of pension industry practitioners and other observers of the pension transfer market who looked at the freshly-published list.
Six Gibraltar schemes disappeared from the list, as did two Maltese schemes, according to one source. Some nine countries vanished from the list in total, while the US – which disappeared earlier this year – returned, with one scheme (the same one that fell off the list in March).
Most of the nine countries that vanished from the list weren’t major pension transfer destinations, according to one expert, who noted that they nevertheless included a number of European countries, including the Czech Republic, Greece and Portugal.
Among those most relieved that there weren’t more schemes and countries missing from the latest list were understood to be those involved with pension schemes based in Gibraltar, which had scrambled to put a new pension regulation regime in place ahead of HMRC’s deadline.
Although it has been accepting UK pension transfers for a number of years, the new legislation had been deemed necessary to meet HMRC’s new requirements for overseas jurisdictions to which pensions are transferred to have a pensions regulatory regime in place.
John Batty, an executive with the Isle of Man-based pensions provider Boal & Co, warned that the list that could matter more than the one published today could be the one due on 1 June, “as this is the deadline for schemes to confirm that they meet [HMRC’s] new regulations”.
“Today’s list doesn’t take account of the new requirement for a ROPS to be regulated, it merely [shows] those schemes that have agreed to operate the new tax charge,” he added.
“Hence only a few schemes have come off the list today.”
As reported, the last publication of the “ROPS notification list” was on 6 April, as the new tax year began, and this list was subsequently suspended eight days later, when it was replaced by an HMRC statement saying it had been suspended altogether until 18 April.
“Since 9 March, scheme managers have been required to pay tax to HMRC on certain transfers,” the statement added, referring to a new, 25% tax on transfers to most non-European Union countries that had been unveiled for the first time the previous day, by Chancellor Philip Hammond in his Budget.
“They had until 13 April to confirm to HMRC that they agree to operate this new tax charge.
“If a scheme appeared on the ROPS notification list that was available on 13 April, and HMRC has not received the scheme manager’s confirmation that they agree to operate the new charge, their scheme will not appear on the list when it returns on 18 April 2017.”
The current ROPS (registered overseas pension schemes) transfer regime, previously known as QROPS, has been running – with periodic, sometimes major, changes – since 2006, when it was brought in during an overhaul of UK pension regulations known as A Day.