Guernsey QROPS Changes

If you were considering transferring your pension to a Guernsey QROPS please contact us immediately for ALTERNATIVE options.

As of April 2012, due to a review of QROPS providers by HMRC, Guernsey QROPS are now no longer open for non residents of Guernsey. If you live anywhere in the world other than Guernsey you CAN NOT transfer your UK pension to a Guernsey QROPS.

Why HMRC have removed all Guernsey QROPS from their list?

It is not clear why HMRC have done this but the likely reason is that Guernsey have double taxation treaties with a relatively small number of countries.

For the majority of transfers into a QROPS, we now recommend a Malta QROPS solution. This will not be the case for everybody. To find out if QROPS are right for you and if so which jurisdiction is the best option contact us today.

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Guernsey QROPS working with the HMRC

Guernsey is currently working closely with the UK tax authority HMRC to ensure that they will comply with the draft legislation announced in December. This almost certainly means that Guernsey will have to change their local pension regulations to continue to be a Guernsey QROPS jurisdiction. The issue that has spurred these rule changes is as follow: if you transfer your UK pension to a Guernsey QROPS and don’t actually live on

Guernsey you can receive your income free from Guernsey income tax.However if you have a Guernsey pension and do live on Guernsey then 20% income tax is deducted at source. HMRC say this should not continue. They say that the same tax treatment should apply whether you live in Guernsey or not. If this is not the case from 6th April 2012 then Guernsey as a jurisdiction would almost certainly lose its Guernsey QROPS status.

What’s been the response to maintain its Guernsey QROPS status?

Guernsey has been very busy on two fronts.

On one, the Guernsey Association of Pension Providers GAPP has been busy lobbying HMRC to not bring in the new rules. And on the other, developing it’s very own plan B so that in the very likely event that HMRC do change the QROPS rules and do not succumb to Guernsey’s lobbying, they are able to change the local pension regulations on Guernsey to fall in line with HMRC’s new rules and maintain its Guernsey QROPS status.

Guernsey has already written the new regulations and it will become law when HMRC as expected do confirm that the proposed changes will come into effect on 6th April 2012.

What’s the solution to retain the Guernsey QROPS status?

Guernsey will simply offer two pension one where you can receive tax relief on contributions made to your pension, just like in the UK; in this case you will also be taxed when you take an income.

The other option which will means that no tax relief is received on monies in and no tax will be payable on income out, simple! And it is the second option that will be the new Guernsey QROPS.

So understandably Guernsey is not willing to lose its coveted QROPS status and the many jobs that the industry provides for the Island. They are now waiting for the almost certain confirmation that HMRC will require Guernsey rules to be altered. The rules will be changed and a Guernsey QROPS will continue to be an attractive destination from where pension income is paid without deduction of tax at source.