Hong Kong QROPS

Hong Kong QROPS are still on the HMRC list of approved QROPS schemes. However HM Revenue & Customs are showing concerns over the jurisdiction to the validity of its QROPS schemes.

We have been aware for a number of months that companies attempting to establish a new QROPS scheme in Hong Kong have been faced with obstacles and finding it to be near impossible. With this in mind it appears that HM Revenue & Customs are having a serious look into Hong Kong as a QROPS jurisdiction. QROPS jurisdictions have to have in place a recognised tax system in that country that regulates pensions and taxes accordingly. Hong Kong appears not to meet the standards that HMRC recommend as the Hong Kong schemes do not tax pensions at an equivalent UK standard

Hong Kong pension schemes do not tax money going into the pension or when benefits are taken from the pension. A long with cases of miss selling and pension busting marketing, Hong Kong has definitely got its head on the chopping block

Tax Free

Many people are finding the promise of a tax free lump sum, including the allowed 25%, is not being granted while in Hong Kong QROPS.

In Hong King the trustees have a right to turn down the application of a tax free lump sum. Unlike other jurisdictions, the Hong Kong QROPS scheme trustees must have an application made to them requesting a lump sum release. This application has to be completed by a financial adviser and the client and prove that the remaining pension funds are sufficient enough to supply the member with an income for life. There is no guarantee the trustees would make the payment.

To find out more about QROPS transfers and the different types of QROPS pensions, complete the contact form on the contact QROPS Adviser page or email us direct.