January is a good time, for those with a QROPS in France, to recap on recent developments in UK pension legislation. Things are always changing in the world of QROPS. Let’s consider how these changes will affect those living in France.
QROPS in France – legislation developments
On 17 June 2013 the French law, Loi de Finances Rectificative, took effect wherein trustees of foreign trusts were obliged to report UK personal pension vehicles that have French tax-resident beneficiaries to the French fiscal authorities. As such, beneficiaries and/or settlors must declare the market value of the assets, rights or capitalised income on all trusts which have been in existence since 1 January of 2013. The new legislation appears to be part of a broader campaign to clamp down on undeclared wealth in France. Investors in possession of a QROPS in France need to give this due consideration. Uncertainty over the laws governing their structure appeared to have been cleared up, when the UK House of Parliament finalised amendments to the legislation in October 2013. HMRC have introduced additional reporting requirements. These include the following:
- Managers are required to renew the status of their schemes every five years with HMRC. Failure to do so will result in the scheme losing its status
- Providers must report payments that have been made from funds transferred out of a UK pension scheme. Former QROPS must also abide by these requirements
- Former providers that have been found to have breached the rules will be subject to penalties
- HMRC will have the power to remove the QROPS status from providers should the scheme manager provide false or misleading information in terms of the scheme’s compliance with applicable legislation
From the provider’s side of the equation, Malta led the way through the imposition of legislation governing the way QROPS are to be handled within its jurisdiction. The Maltese regulatory authority requires the administrator/trustee of each scheme to submit an independent audit each year, which covers the scheme’s finances and includes a statement that addresses the scheme’s compliance. The evolution in legislation is gathering pace; day by day, the framework for UK pension transfers continues to strengthen!