What happens to a delisted QROPS?

New UK offshore pension tax rules have led to hundreds of QROPS schemes being delisted from the HM Revenue & Customs list of registered pensions.

Delisting a QROPS leaves someone saving for retirement in limbo – so here is some information about QROPS that are no longer open for business:

Why was my QROPS delisted?

Because HMRC changed the qualifying rules for a QROPS – short for qualifying recognised offshore pension scheme – that meant the scheme no longer meets the criteria.

If the scheme qualified prior to April 6, 2012, the QROPS is still a pension in the country or territory where it is based, but stops being a QROPS.

Will delisting affect my QROPS pension fund?

HMRC have stated that any pre-April 6 2012 QROPS will continue as usual without any changes or penalties, so your investment should be safe. However, some providers may have clauses in their contracts that change charges and investment returns in the event of delisting, so check out your QROPS contract.

Should I switch my QROPS?

Don’t jump in and transfer your QROPS pension fund without conducting a review. Some QROPS schemes have expensive exit fees that could make transferring out more expensive than its worth. It is likely that a switch will be needed, so contact us today. As the leading QROPS advisory firm, we have access to the latest QROPS schemes that other advisory firms do not.

Can I still transfer a UK pension in to a delisted QROPS?

No. A delisted QROPS is not a qualifying scheme, so any transfer in is considered an unauthorised withdrawal from the originating UK pension scheme, attracting a tax penalty of 55% of the value of the transferred fund.

Does the 10 year reporting rule apply to a delisted QROPS?

No. A pre-April 6 2012 is not a QROPS so the new rules do not apply. However, the five-year reporting rule requiring the fund administrator to report any withdrawals or payments to HMRC does still apply.

Should I still transfer a UK pension fund in to a QROPS?

This depends on your personal financial circumstances. If you already have a QROPS, you may end up with two pensions – a pre and post April 6, 2012 QROPS. Speak to one of our advisers as soon as possible to find out how we can help you. The rules are complex and proffesional QROPS advice is required.