The Qualifying Recognised Overseas Pension Scheme has, and always will have, its place.
The QROPS has quite rightly (in our opinion) been attacked by HMRC and the UK government in recent times, but as with all financial planning miss-selling and issues, the problem is never with the ‘product’ but with the way it is sold and the information, lack of information, or absolute inaccuracies used when a consultant has sold it. Indeed, the Maltese regulator, the MFSA, have recently announced new rules in relation to their QROPS, which has led to many clients being ‘orphaned’ due to unregulated advisers no longer being able to service their account.
QROPS have unfairly been given a poor name, not because they are a poor product, but because they were heavily ‘mis-sold’. Just because an individual lives outside of the UK for a period of time does not qualify the QROPS as the most suitable pension wrapper for them. All too commonly, it has been ‘sold’ as the perfect international pension solution, often with inaccurate statements surrounding the tax treatment of withdrawals, however in almost all circumstances we’ve encountered when giving a second opinion, it has not been the most suitable solution. In the event we find an unsuitable QROPS, we can help in transferring pension funds back to a UK SIPP or private pension (providing a much higher level of regulatory protection, lower costs and actually far more planning functions) but this is often complex, laborious and can trigger retrospective taxation. Be cautious when taking advice and if you’ve received advice or indeed taken out a QROPS, we would be happy to help even if it’s a few tips and pointers which won’t cost you anything.
In far too many cases, the QROPS has been the easiest solution for an unscrupulous salesman to lie and deceive with. The QROPS used to be very under-the-radar; an overseas pension trying to dodge taxation and allow miss-selling across the international industry, with nothing more than a salesman attached with little knowledge or understanding of the true benefits and drawbacks.
Whether you have a QROPS in Malta, Gibraltar, Guernsey (now de-listed) or any other jurisdiction, we can help, but please be prepared for some difficult conversations as we work to recover your planning.
All that said, as we opened, the QROPS does have its place. We have advised upon QROPS planning for individuals genuinely moving overseas to live in retirement (and having made a clear commitment to that plan, such as a property purchase) or those with very large funds and a desire for advanced planning.
If you have returned to the UK and hold a QROPS, or are still working internationally but would like a second opinion about the QROPS you hold our advisory team can help. Typically, a UK IFA would not have the skillset or experience to properly advise around QROPS, but our advisers are experienced internationally, understand and are comfortable with typical offshore arrangements, their benefits and limitations.
