The delisting of two Qualifying Recognised Overseas Pension Scheme (QROPS) jurisdictions – Bangladesh and Malaysia – makes November the first month since April 2012 to witness a decline in the total number of available schemes.
Neither HM Revenue and Customs (HMRC), nor the financial authority in either of the two counties have given an explanation why.
The 1st of November 2013 HMRC QROPS list contained a total of 3,180 QROPS – five less than the list issued on October 15, 2013.
That list also witnessed four QROPS in both St Lucia and St Vincent & the Grenadines suspended.
In 2012, the Cyprus and Slovakia jurisdictions were delisted, and in August of this year, a sudden delisting of 23 QROPS from Hong Kong left financial professionals and clients in the lurch – with only two of the country’s QROPS actively “on duty.”
What a QROPS suspension means
Generally a suspension means pension funds can no longer be transferred into the QROPS, yet the existing QROPS investors will not suffer any tax or financial penalties.
There are several reasons a QROPS can be suspended:
- HMRC and the QROPS provider are in review
- The QROPS has stopped functioning as a QROPS
- The QROPS has ceased acting in accordance with HMRC rules
Usually a suspension can be seen as a positive – in that it shows a tightening of QROPs rules which simultaneously protects investors and the QROPS legislation itself.
Yet whilst many schemes are reinstated, if a whole jurisdiction has been removed from the list, chances are that country’s schemes will not return to the list.
To recap, since November 2012, Bangladesh, Latvia, Malaysia, Slovakia, St Lucia, and St Vincent & the Grenadines have been delisted.
Of these, Latvia is the only one to return to the list – meaning there are now 42 active financial jurisdictions, when there was 46 a year ago.
HMRC’s next list is due on November 15, 2013, and it remains to be seen whether either Bangladesh or Malaysia will return.