QUALIFYING RECOGNISED OVERSEAS PENSION SCHEME (QROPS)

MW IOM SIPP is a QROPS and is featured on the HMRC website as such.

Currently QROPS is predominantly used to transfer the UK pension assets into IOM schemes for IOM residents. This can enable them to consolidate their funds and also avoid UK tax charges, if set up properly.

  • For a scheme to be accepted as QROPS it must meet certain conditions:

  • Be established in certain jurisdictions or in a country with which UK has a full double Taxation agreement

  • Be open to local residents

  • At least 70% of transferred funds must provide income benefits for life

  • Benefits must commence no earlier than age 55

  • Must notify HMRC of certain events
A client can transfer UK pension assets to the MW IOM SIPP either in cash or in-specie but it is not possible to transfer in protected rights.

If in drawdown already in the UK, the QROPS must pay drawdown on a ‘like for like basis’ and this must be agreed with the Assessor of Income Tax.

QROPS will be of interest to UK residents as they seek to protect their wealth going forward. This will allow us to bring some clients back to the island. As we do not give financial advice we will introduce them to the advisers we are working with.

We have a leaflet you can download by clicking on the link below.

NB. FUNDS TRANSFERRED UNDER QROPS RULES WILL ONLY BE ABLE TO TAKE 25% TAX FREE CASH FOR AS LONG AS THE FUND COMES UNDER THE QROPS REGIME - CURRENTLY 5 FULL TAX YEARS FROM THE DATE THE MEMBER CEASED TO BE UK RESIDENT FOR TAX PURPOSES.

BENEFITS FROM FUNDS TRANSFERRED UNDER QROPS RULES CANNOT BE TAKEN BEFORE AGE 55 FOR NON-ISLE OF MAN RESIDENTS. ISLE OF MAN RESIDENTS CAN TAKE BENEFITS FROM QROPS TRANSFERS FROM AGE 50 SO LONG AS THEY HAVE BEEN NON-UK TAX RESIDENT FOR 5 FULL TAX YEARS.

A QROPS TRANSFER IS TREATED AS A BENEFIT CRYSTALLISATION EVENT BY HM REVENUE AND CUSTOMS AND MAY BE SUBJECT TO TAX CHARGES UNLESS APPROPRIATE PROTECTIONS HAVE BEEN TAKEN. PLEASE DISCUSS THIS WITH YOUR ADVISER.

QROPS Transfers