The Guernsey Association of Pension Providers (GAPP) welcomes the publication today of the proposals by the States of Guernsey to amend its income tax laws on pensions saving to meet the revised UK requirements for Qualifying Recognised Overseas Pension Schemes (QROPS) expected to come into effect on 6th April 2012.  

While GAPP has raised significant concerns about those changes to HMRC and has recommended that certain aspects be reconsidered, or deferred for further consideration, nonetheless the very limited time allowed by HMRC for consultation has resulted in the need to move forward with alternative solutions notwithstanding the shortcomings of the HMRC intended changes.

The Guernsey proposals, which are subject to a resolution of the States of Guernsey at a meeting in early March, introduce a completely new pensions regime open to both Guernsey residents and non residents alike which provides no tax relief on pension contributions but enables benefits to be paid free of Guernsey tax.  It is anticipated that current Guernsey QROPS will transfer into this new regime and thus remain compliant within the new “Condition 4” of the HMRC changes.

President of GAPP, Stephen Ainsworth, said “We have been working very closely with the Guernsey Income Tax Office and with senior politicians to create a flexible but robust pensions system which not only meets the needs of Guernsey residents but secures the position of those former members of UK pension schemes who have trusted Guernsey QROPS with their retirement savings.  I am delighted with the result, which demonstrates the importance of pensions saving within Guernsey.”

Roger Berry, Chairman of the QROPS Sub Committee of GAPP, added “This is an example of all that is best about Guernsey, with politicians, officials and industry working together in harmony in the interests of pension scheme members.  This follows Guernsey’s initiatives in 2008 when our pension regulations were amended to ensure that Guernsey QROPS  could not be misused and in 2011 when GAPP introduced the world’s first Code of Practice for QROPS providers.  The latest Guernsey proposals will provide members with a bona fide pension scheme capable of meeting HMRC requirements and still upholding the original spirit of QROPS.”

As a result of these changes Guernsey remains a leader in international pension provision and the leading player within the international QROPS market.  Much of the funds from QROPS established in Guernsey are invested through the City of London and will therefore also benefit the UK economy.  The importance of the Crown Dependencies to the City of London was recognised within the recent Foot report, commissioned by the UK Government.  This investment benefit could be lost if QROPS funds were transferred to locations beyond the British dependent territories.