Boal & Co has been forced to de-register its Isle of Man-based Trinity QROPS from 4 April. The move is due to Isle of Man tax legislation not changing in time for the 6 April 2012 transition to comply with new HMRC regulations.
Commenting on the decision, Gary Boal, managing director of Boal & Co, says he believes it is a temporary measure until the Isle of Man alters it tax regime to comply. Existing investors will be unaffected.
Under the new legislation announced by HMRC, jurisdictions must operate a level playing field with regard to the tax treatment of resident and non-resident QROPS investors by 6 April 2012. Currently Isle of Man QROPS are tax exempt for non-residents, but not for residents.
“Of all of our Isle of Man QROPS, only our “50C” schemes are affected by the new eligibility criterion. Whilst Guernsey has adapted its pensions tax code to introduce s157E by 6th April, the government in the Isle of Man has failed so far to do the same. This leaves us no alternative but to de-register Trinity as a QROPS. We are extremely disappointed at having to do so,” said Gary Boal.
Boal & Co’s Guernsey scheme “Synergy” will be converting to the new s157E regime on 6th April to ensure that it meets HMRC’s new “benefits exemption test” which comes in on that date.
Boal confirms that existing members of Trinity are completely unaffected as HMRC changes are not retrospective. “HMRC’s own FAQs make it abundantly clear that pre 4/4/2012 transfers are “recognised transfers” if the scheme was a QROPS at the time of transfer,” explains Boals, who also says that the firm has also adapted a new business protocol to facilitate the availability of Trinity in certain client situations.
In the meantime, Boal says the firm expects IoM to adapt its 50C tax code in the near term. “We continue to press for action in this regard”.
In early March, Stuart Clifford, Chairman of the Isle of Man’s Association of Pension Scheme Providers (APSP) confirmed the Isle of Man Government was working on a number of options, depending on what emerges on UK Budget Day.
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