South Africa loses QROPS status
South Africa has been struck off the list of financial jurisdictions offering QROPS expat offshore pensions.
The latest HM Revenue & Customs QROPS List published this week has no mention of the African country. The ABSA Group Pension Fund was the final South African QROPS.
Typically there are three major reasons for a jurisdiction to lose its QROPS status. First is that HM Revenue and Customs are looking into the administrative or tax status of the scheme.
Second reason is that the last client has drawn down on their fund or transferred out. Last motive that can lead to a delisting is that the QROPS provider shuts down.
South Africa had been on the HMRC list since QROPS were first introduced in 2006. Between March 2010 and June 2015, the number of QROPS peaked at between 28 and 31 pensions.
After HMRC introduced tax and rules changes in June 2015, the number slumped to seven QROPS, rising to a recent peak of 12 pensions at the start of 2016.
The only new jurisdiction to offer QROPS this year was Hong Kong, which joined the listing in May.
With South Africa missing, the number of QROPS jurisdictions falls to 28 worldwide, as they lose favour with expats.
The QROPS overseas transfer charge has proved to be a failure as a money raiser for the tax man. Only £1.4m was paid from 30 transfers to HM revenue & Customs under the rule by expat retirement savers switching their offshore pensions in the 2017-18 tax year, as reported by specialised media outlet Iexpats.
HMRC had forecast the charge would raise £65m.