Following the Income Tax (Amendment No. 44) (Jersey) Law 2014
(the Amendment) and the introduction of greater
flexibility as regards international pension fund transfers, both
to and from approved Jersey schemes and the ability of non-resident
individuals to contribute into Retirement Trust Schemes
(previously, these schemes were known as Retirement Annuity Trust
Schemes and were solely for Jersey residents), Jersey is now a
"QROPs friendly" jurisdiction, ie non-resident pension
members can transfer their UK pension funds into Jersey. A
QROPS (a Qualifying Recognised Overseas Pension Scheme) is an
overseas pension scheme that meets certain criteria set by HMRC and
which can receive the transfer of pension benefits under a UK
pension, without incurring tax penalties (a transfer to a scheme
without QROPs status can incur a penalty of up to 55% of
the transfer value).
To qualify as a Jersey QROPs:
the scheme must be approved as a pension scheme by the
Comptroller of Taxes in Jersey;
the rules must provide that at least 70% of the funds
transferred in to the scheme will be designated by the scheme
manager for the purpose of providing the member with an income for
pension benefits must not be payable before age 55 or earlier
ill health; and
membership of the scheme must be open to Jersey residents.
To comply with the requirements of a QROPs, the scheme manager
(ie the person or persons administering or responsible for the
management of the scheme) must obtain a reference number from HMRC
and must notify HMRC of certain information about the scheme,
including the country where the scheme is established, confirmation
of how the scheme meets the requirements to be a recognised
overseas pension scheme and provision of evidence (eg by supplying
a copy of the scheme rules) to show that the scheme is a recognised
overseas pension scheme.
The scheme manager must also undertake to inform HMRC if the
scheme ever ceases to be a recognised overseas pension scheme and
comply with any prescribed information requirements that fall on
the scheme manager, including answering information notices and
providing HMRC with certain information on payments made in respect
of certain scheme members.
HMRC publishes and updates regularly a list of schemes that have
told HMRC they meet the conditions to be a QROPS and have asked to
be included on the list. The list is for UK and overseas
pension scheme administrators and managers, as part of their due
diligence, to verify that a scheme that is on the list has notified
HMRC it meets the conditions to be a QROPS and it should be noted
therefore that inclusion of a scheme on the list does not mean that
a scheme is a QROPs or that HMRC has checked all the information
provided for any named scheme.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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