Isle of Man QROPS providers have hung out the ‘business as usual’ sign after new UK offshore pension rules decimated the markets in Guernsey and New Zealand.
The Isle of Man was the third biggest loser in the QROPS tax shake-up – losing 16 schemes but retaining 173.
In comparison, Guernsey had to close 300 QROPS leaving just three open and New Zealand lost 41, leaving 23 trading.
All the Isle of Man’s 50c schemes were removed from HM Revenue & Custom’s QROPS list as they failed to meet the new qualifying rules.
Association of Pension Scheme Providers (APSP) chair Stuart Clifford explained providers were disappointed but relieved.
“There was some disappointment at the apparent curtailment of a development opportunity but few, if any, of our members are reliant on international QROPS for a living,” said Clifford.
“Schemes written under our 1989 Act are still all there on the HMRC list and we have one of the best regulated pension environments in the world, as has long been the case. Our industry has always been about international pensions of which QROPS is a strand. We carry on pretty much as before.”
Clifford disclosed that providers and lawmakers assumed the 50C schemes would fail to meet stringent HMRC qualifying conditions as soon as the UK government released the draft rules for consultation in December.
“They were never going to pass the proposed new HMRC Benefits Exemption test. The question was always whether or not we should make changes to 50C to make it compliant,” he said.
IoM QROPS providers and the government decided to delay action, unlike Guernsey which quickly passed laws aimed at bypassing the new QROPS rules before April 6, when they came in to force.
“The happy outcome is that our member’s businesses do not appear to have been unduly disrupted and our pensions industry will continue to go from strength to strength,” he said.