02 Dec, 2016
deVere boss commends overseas pensions tax plans
Nigel Green, chief executive of deVere Group, has praised government plans to bring the tax treatment of overseas pensions more closely in line with the UK's domestic pension tax regime.
Plans to more closely align Qualifying Recognised Overseas Pension Schemes (QROPS) with UK rules were announced in last week's Autumn Statement.
Under the plans, QROPS will be taxed in the same way as a UK pension for anyone who then later returns to the UK.
Currently 90% of income from a QROPS is subject to income tax, as opposed to 100% in a UK pension scheme.
Green said that as well as the tax alignment, member payment provisions will extend from five to 10 years, and the eligibility criteria for a scheme to be listed as a QROPS will be tighter.
"I welcome the government's plans as they will help ensure QROPS are not misused or mis-sold," he said.
QROPS are designed to provide an income in retirement for those permanently living outside the UK or planning to do so, as well as to offer all the many associated financial benefits of having an HMRC-recognised pension scheme based in a jurisdiction outside the UK.
Green says the move means clients are even more protected, which in turn makes QROPS an even more attractive option.
He said: "It further highlights that QROPS still keep the same standards or equivalent as UK pensions, that they are fully part of the retirement planning 'establishment', and the deployment of more and more government resources demonstrates the market it well-governed."
Green predicted the changes will trigger a surge in the number of people seeking to transfer their pensions out of the UK, before the new plans come into full effect.
"As the world becomes ever more internationally mobile, international pension planning is, of course, by default, an enormous growth area.
"As such, I welcome the plans to make the overseas pension transfer market even more robust."