Share
Print
Print Share

QROPS changes creates inconsistencies but opportunities still exist

26/03/2015

The recent Statutory Instrument* has confirmed QROPS (Qualifying Recognised Overseas Pension Schemes) will temporarily be unable to benefit from the full UK pension flexibilities. However, this does not apply to all QROPS. Some jurisdictions will be able to offer the pension flexibilities from 6 April 2015, depending on the qualifying rules relating to that specific jurisdiction and local jurisdiction amendments. Opportunities will exist post 6 April 2015 for those using a QROPS to gain flexible access to their pension savings in a tax efficient way.

In some jurisdictions, in order to qualify as QROPS, a scheme’s rules must provide that at least 70% of a member’s UK tax relieved fund provides an income for life. However, schemes which qualify due to being established in an EU jurisdiction, such as Malta, do not rely on this requirement. This means that clients who hold a QROPS in such jurisdictions are able to benefit from the new pension flexibilities, providing the local rules are changed to allow this.

The decision on which QROPS to choose will now need to take into account how the client intends to access their pension fund and whether the full pension flexibilities are required. This is however just a short term consideration. Longer term it is anticipated that all QROPS will be able to benefit from the new pension flexibilities, as legislation to replace the 70% rule will be forthcoming, although what exactly any new conditions will entail is unknown.

Jon Greer, pensions’ expert, Old Mutual Wealth, comments:

“The new requirements relating to QROPS may have created some inconsistencies in the market, but good financial planning opportunities using QROPS still exist. Regulations will vary according to the jurisdiction of the QROPS and some jurisdictions will allow the client full flexible access to their money. Advisers and clients should check with their QROPS provider if they are in doubt as to how the new regulations impact them.”

 

*The Overseas Pension Schemes (Miscellaneous Amendments) Regulations 2015 - www.legislation.gov.uk

 

For more information contact:

Sophie LentonOld Mutual Wealth 02380 916 77007834 499 558

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.1 billion in customer investments (as at 30 September 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• The private client advisers business is now Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.