31 May 2012

QROPS Clarifications

The Guernsey Association of Pension Providers (GAPP) welcomes the clarifications set out in the Guernsey Income Tax office Media Release dated 30th May 2012 and is grateful for the continuing efforts of the Director of Income Tax and his senior team in their ongoing discussions with Her Majesty’s Revenue and Customs (HMRC) in relation to the status of Qualifying Recognised Overseas Pension Schemes (QROPS) established in Guernsey.

The clarifications now confirm that a wider range of Guernsey pension schemes established solely for Guernsey residents can retain their QROPS status but do not yet address the broader issues of domestic pension schemes established to cover more than one jurisdiction (such as both Guernsey and Jersey) or international pension schemes generally. These remain the subject for further discussions with HMRC and GAPP is keen that progress on these issues is made as soon as possible. The current arrangements continue to disrupt the normal business activities of employers in the Island seeking to attract key staff from the UK as well as the interests of Guernsey pension providers, where job uncertainty remains for 200 staff in its pensions industry.

President of GAPP, Stephen Ainsworth, said "We welcome this modest relaxation for Guernsey domestic schemes, though remain concerned that the restrictions which remain are greater than those which apply in other territories. We do not believe that this is proportionate or in line with HMRC’s stated policy objectives. We are seeking to engage with HMRC on this and other issues in the very near future."

Roger Berry, Chairman of the QROPS Sub Committee of GAPP, added "GAPP has entered into a dialogue with HMRC in order to seek some resolution and understanding of HMRC’s position following very specific targeted legislation which is not applicable to other QROPS jurisdictions. The motivation appears not to be tax driven as HMRC’s own exchequer impact assessment states the measures are expected to have a negligible effect on receipts."