The latest HMRC list of QROPS list published by HMRC revealed a reduction in the number of providers based in Hong Kong from 25 to 2. The two remaining providers currently accepting UK pension transfers are the Asia Alternative Asset Partners Limited Retirement Benefits Scheme and David Watt Retirement Benefits Scheme. The updated list can be found on the HMRC website.
In recent years Hong Kong has found itself in ‘murky waters’ as a place for hosting QROPS. There have been several closures of schemes as a result of so-called “pension busting” and miss-selling. The removal of this large batch of Hong Kong based schemes will cast doubt on its viability as a suitable jurisdiction for providers.
Approved plans that agree to have their details published are listed on the HMRC website. A UK Pension administrator will confirm a listing before agreeing to a transfer. If not listed, the administrator will contact HMRC for confirmation. The list is usually updated twice a month by the ‘Pension Schemes Services’ department. A scheme’s name will be promptly removed from the list once HMRC is aware that it has ceased to be a QROPS. Furthermore, should HMRC have concerns about the scheme’s status at any time, then the scheme’s name may be removed whilst HMRC carries out further checks.
Any scheme that is to be removed from the list is notified in advance by HMRC and the reasons for delisting explained to the scheme manager. In general, schemes are removed as a result of insufficient pension regulation in the jurisdiction. It is understood that HMRC makes a distinction between providers who have applied for an exemption from regulation and those that have not. It has been suggested that those schemes which opted not to be regulated are among those which have been removed from the QROPS list. It should be noted that HMRC is not obliged to make public the reasons behind a particular scheme being delisted. If members of a QROPS are concerned about it being removed from the published list, their first point of contact should be the scheme manager.
Changes to the HMRC list of QROPS
The total number of QROPS currently stands at 3,103 schemes across 46 financial jurisdictions. Australia is the leading QROPS provider with 1,204 schemes listed and a market share of 38%. This is followed by Ireland with 721 schemes and a 23% market share. In third place is the Isle of Man with 244 schemes and a 7% market share (see chart).
Changes in legislation during 2012 resulted in a number of schemes being established in Malta; many of these migrated from Guernsey. Malta was seen as a fresh start for the QROPS industry. It has the advantage of being able to offer EU country-based schemes and has an existing double-taxation agreement (DTA) framework. To encourage the development of the market, the Maltese government has instructed several local regulators to work with HMRC in order to ensure that all rules and procedures are adhered to.
The latest cull of the list comes in the wake of last month’s delisting of 432 by HMRC schemes in error, due to what was described as a ‘technical glitch’. This followed HMRC’s unsuccessful High Court challenge in June re the delisting of ROSIIP, the Singapore-based QROPS. It appears to be more than just ‘teething problems’ for the industry; the recent changes to the HMRC list of QROPS suggest that a ‘Brave New World’ is unfolding in terms of the landscape!
For further information please download our free QROPS Guide