Which Jurisdiction For Your QROPS?

The local jurisdiction will set out how the local pension scheme is structured, however many QROPS follow a similar structure:

• There is a master trust set up which appoints a corporate trustee (the QROPS provider) and their powers, roles and responsibilities in terms of administering the QROPS.
• The trustee must be based outside the UK for the scheme to be considered as a QROPS.
• There are usually wide investment powers allowing flexibility for the trustee to invest in a wide range of assets – for example cash, bond, property, hedge, equity and commodity funds.
• The trustee of the QROPS holds these investments on the member’s behalf and has investment powers. They will often appoint an Investment Manager to switch investments on their behalf as market conditions change.
• The trustee would also be responsible for making payments of benefits from the QROPS to the member.

The local jurisdiction will have rules within local legislation and practice which need to be adhered to in order to qualify as a local pension. In addition, if the local provider would like to become a QROPS provider they must meet a number of HMRC rules relating to how and when benefits can be taken, along with defined reporting requirements while the member is UK resident and for five complete tax years after the member has left the UK. The rules of the scheme must be broadly equivalent in terms of payment of benefits to a UK-registered pension scheme to maintain their QROPS status.

I have attached a simple summary of the differences between three of the major QROPS jurisdictions; Isle of Man, Guernsey and Hong Kong. My current “favourites” are Guernsey and Hong Kong since they will not tax you on your pension if you live outside of the countries.
Contact me if you would like to learn more or if you are ready to see what benefits there may be for you personally.