The first Gibraltar QROPS is on the launch pad ready for take-off as provider London & Colonial announces a solution over disagreements with the UK over taxing pension benefits has been reached.
The firm expects to start accepting pension transfers from the UK in April.
“It appears that common sense has prevailed, and we are pleased to see that this issue appears to have been resolved,” said London & Colonial product development manager Adam Wrench.
Although HM Revenue and Customs nor Gibraltar authorities have confirmed the row is over, Wrench indicated “reliable market sources” say a settlement has been thrashed out.
Wrench said his firm is just waiting for the official announcement to open the doors to client pension transfers.
This announcement will involve a law change in Gibraltar scrapping a 0% tax rate for anyone over 60, to bring Gibraltar pension rules in line with those required by HMRC to initiate QROPS transfers.
QROPS Adviser revealed agreement was close in January 2010.
Gibraltar already has QROPS status but self-imposed a ban on taking pension transfer last year pending discussions to ensure the country’s pension rules lined up with HMRC regulations.
HMRC wrote to the Gibraltar pension trustees in September asking for clarification on pension rules, inferring they did not meet QROPS status qualification.
Both sides disagreed over the 0% tax rate, but Gibraltar backed down to avoid losing QROPS status.
“After a lot of frustration last year, with the inevitable missed business opportunities, it would appear we have some good news at last,” said Wrench.
Gibraltar is expected to attract a high level of QROPS business due to close historical ties with the UK, English as a first language and a reputation as a stable and trustworthy offshore financial centre.
QROPS Adviser will have access to the London & Colonial scheme when it opens, along with 1,400 or so other QROPS pensions worldwide. Formal details of the Gibraltar QROPS have not been revealed, but are expected soon to allow transfer preparations to start.
