Do yourself a favour and listen to an expert QROPS adviser

The news that Gibraltar QROPS providers have frozen pension transfers is a lesson for offshore investors in finding the right advisor.

Anyone with UK pension rights looking to transfer their funds in to a QROPS must take professional, independent advice from a QROPS expert.

Investors need a QROPS adviser who looks at the whole of the market and has a finger on the pulse of what’s going on behind the scenes.

Many QROPS advisers tailor their advice to a particular provider or jurisdiction, which is all well and good until some unforeseen problem strikes.

With Gibraltar it’s whether the county’s 0% tax rate for the over 60s is really a tax rate - if HM Revenue and Customs decide it is, then Gibraltar QROPS are OK.

If not, they breach the QROPS rules and any movement of cash from a UK pension in to a Gibraltar scheme falls outside the QROPS rules and becomes an unapproved transfer.

Unapproved transfers attract a 40% tax penalty and up to a 15% surcharge on the whole amount of money moved from the UK to the overseas scheme.

HMRC recently put pressure on the Guernsey authorities to close a QROPS loophole involving collapsing trusts that allowed transferees to take 100% of their fund tax-free.

If the Guernsey authorities had not agreed to change their rules alongside HMRC recommendations, the country could have been removed from the list of HMRC ‘approved’ QROPS jurisdictions leaving investors high and dry with the prospect of paying hefty fines and penalties on their savings.

Due to the amounts of money involved in QROPS pension transfers; it would be foolish to consider that some of the people involved in the system as advisers are not abusing the system.

The lesson for investors is do your due diligence before committing pen to paper on any transfer -

• Always use a regulated UK adviser that gives you recourse to a complaints procedure and compensation from the UK Financial Services Authority
• Make sure your adviser looks at the whole of the market to tailor a solution for your financial circumstances rather than squeezing a square peg in to a round hole by only offering limited QROPS solutions
• Choose a firm that has the skills and experience to monitor the QROPS market.

Remember it’s your money at risk and get-rich-quick schemes that sound too good to be true normally are…

To speak to an expert about your situation, fill out the form on the contact Qrops Adviser page, call us direct on 0032 (0)2 400 0087 or email us at info@qropsadviser.com.