The Isle of Man's pension industry is emphatic that it will emerge "almost unscathed" from the recently imposed changes to the UK's list of approved QROPS.
Earlier this month, a number of IoM schemes, written under the Island’s Section 50C legislation, were removed from the UK list. But the reaction teh Association of Pension Scheme Providers (APSP) received from its members has been encouraging as Chair Stuart Clifford confirms. “Of course, there was some disappointment at the apparent curtailment of a development opportunity but very few, if any, of our members are reliant on international QROPS for a living. Schemes written under our 1989 Act are still all there on the HMRC list and we have one of the best regulated pension environments in the world, as has long been the case. Our industry has always been about international pensions of which QROPS is a strand. We carry on pretty much as before.”
Clifford makes the point that ever since HMRC opened the consultation on QROPS back in December, providers and legislators, alike, had anticipated that the IoM 50C schemes would be removed, either voluntarily by the scheme providers or by HMRC. “They were never going to pass the proposed new HMRC Benefits Exemption test. The question was always whether or not we should make changes to 50C to make it compliant.”
The decision reached was to take a “wait-and-see approach” until HRMC’s intentions were apparent. “We engaged early with government and especially the Income Tax Division. In the background we have done a lot of detailed analysis and the subject has been extensively debated in private. We took much from our Income Tax Division’s experience in dealing with the impact on the Isle of Man of legislative change in other jurisdictions, especially the UK, and our stance reflected that. The happy outcome is that our member’s businesses do not appear to have been unduly disrupted and our pensions industry will continue to go from strength to strength.”
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