The newly implemented tax rules outlaw any scheme that gives non-residents a financial advantage, and it demands offshore financial centers offer the same pension benefits to residents and non-residents.
Analysts are predicting that the UK new tax rules are not good news for overseas pension funds. Many HNWI Chinese individuals look to the West has safe places to invest their money, but these new rules, some predict, may convince some HNWI to look elsewhere.
Different parts of the UK are seeing many QROPS businesses shut down since the new rules of were mandated. Gurnsey, the British Crown dependency in the English Channel off the coast of Normandy, has suffered the worst, with over 305 QROPS operating to just three.
In the Isle of Man, 16 schemes have been closed down, leaving only 173 businesses left.
Many analysts perceive the tougher tax rules as a direct attack on financial offshore centers hosting hird party QROPS, which allow pension members to live in a different country where the QROPS are based.
QROPS are very important for offshore financial centers, with around $7billion of pension funds transferred overseas from the UK since QROPS were established in 2006.
Thousands of international works and expats invest in QROPS for tax advantages, mainly because they are flexible investment options and provide shelter from currency rate fluctuations.
A representative from Expat Pensions, a UK firm that specializes in QROPS and pension plans, said ROPS can receive the transfer of UK Pension Benefits without incurring an unauthorized payment and scheme sanction charge. The QROPS program was launched on 6 April 2006 as a part of new legislation with the objective of simplifying pensions. /p>
Despite these setbacks, the QROPS market is still open and offers retirements savers more than 2,000 schemes in around 50 countries.
