HMRC has taken steps to ensure that efficacy of the new QROPS rules established as part of A-day in 2006 is being maintained. The UK tax authorities have pioneered two new pieces of QROPS legislation that will go someway to addressing their concern over QROPS.
The first is a piece of draft QROPS legislation first put out to consultation on 6 December 2011 and came into effect on 6 April 2012 that extends the criteria by which a scheme can be regarded as compliant to the QROPS model. This has meant that some jurisdictions have had to amend their local QROPS legislation. One prominent example is Guernsey which has introduced a new “Section 157E” retirement scheme to maintain their QROPS compatibility.
The second piece of legislation put in place at the behest of HMRC is Statutory Instrument 2012 no. 1221 "The Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) (Amendment) 2012)" which became active in May 2012. This excludes the Section 157E retirement schemes from being classed as ROPS for non-Guernsey residents. Therefore for non-Guernsey residents such a scheme cannot be a QROPS because it would need to be a ROPS first.
Whilst this has made the QROPS market a potentially confusing one, it does not mean that QROPS could not represent a worthwhile option. QROPS markets are still thriving in places such as New Zealand, the Isle of Man and Malta but it is more important than ever to secure QROPS guidance and advice from a quality assured IFA.