As of April 2017, there were 23 listed QROP’s in Hong Kong. One delisted straight away and a further 2 delisted in October. All remaining 19 Hong Kong-based QROPS have been delisted by HMRC and are no longer included in the authority’s list of approved schemes.
As is usual, HMRC has given no reason for the deletion of the 19 Hong Kong QROPS. Similarly, the firms affected by the decision have made no comment yet regarding their products’ loss of status. Hong Kong based QROPS have been established in the offshore pensions marketplace since the start of the QROPS scheme in 2006, averaging between 10 and 26 products over the past 11 years. In April this year, 22 schemes were registered, with one deleted during the month and two more taken down in October, again with no explanation from HRMC.
What Does This Mean
If you have currently retired in China or currently have a QROP in Hongkong, your pension is still safe and will remain with your current provider. Your QROP provider will inform the HMRC of the value within the pension and charges may be applied.
For expats living in China and planning to transfer their funds to a QROPS, the delisting means they no longer qualify for an exemption. They must either pay a 25 percent transfer tax or switch the fund to a SIPP (self-invested personal pension).
By transferring to a SIPP, no tax charged is applied on the transfer, the same with a QROP. QROP’s are no longer suitable if you are living outside the European Union.
What is a SIPP (Self Invested Personal Pension)?
- To help save for your retirement in a tax-efficient manner.
- To enable you to transfer benefits in other registered pension schemes such as QROP’s to your SIPP.
- To enable you to make your own investment decisions in conjunction with your Investment Manager or Financial Adviser. As well as, utilise a wide range of types of investments.
- To give you choice over how and when you take your benefits.
- To allow you to take regular or variable income from your fund while remaining invested.
- To provide you with a tax-free lump sum.
- To provide benefits for your dependents and other survivors on your death.
If you have previously transferred a pension or thinking of transferring a pension, contact Harrison Brook. One of our advisors will have a friendly discussion and check that your needs are met now and in the future.