Three years after Gibraltar’s government was forced to put its Qualifying Recognised Overseas Pension Scheme (QROPS) industry on hold, it has announced that its pension fund administrators now have the green light to resume handling “offshore pensions” for UK pensioners. QROPS are often referred to as “offshore” pensions because the providers work from financial centres outside the UK, as opposed to “onshore” pensions which are UK-based.
QROPS is a pension scheme for British expats, or international workers with UK pension rights, who decide to live permanently outside the UK. It is a pension scheme that is based outside the UK but which is recognised by Her Majesty’s Revenue & Customs (HMRC – the UK’s government tax office) as being able to receive a transfer from a formally recognised UK pension fund.
In September 2009, Britain’s tax authorities suspended the transfer of pension funds to Gibraltar’s pension fund administrators citing concerns over Gibraltar’s 0% tax on the pension income of residents over 60. At the end of August 2012, Gibraltar’s Association of Pension Fund Administrators received written confirmation from HMRC in which it was stated: “There is no HMRC objection to Gibraltar QROPS commencing or resuming the acceptance of transfers from UK registered pension schemes”.