The Guernsey Association of Pension Providers also expressed frustration with the way the matter had been handled by HMRC, and said that it looked forward to further clarification "as a matter of urgency".
As reported, Guernsey government and pension industry officials are coming to terms with the news that going forward, HMRC will only recognise Guernsey pension schemes as qualifying recognised overseas pension schemes for Guernsey residents, rather than for those living in "third countries", such as Europe, the Middle East or Asia.
The action is not retrospective, so it will only affect future pension transfers to Guernsey, as well as transfers of assets into existing schemes.
"It is frustrating that HMRC, having set out its detailed rules, then seeks to set them aside without notice in order to meet an unpublished policy objective," GAPP president Stephen Ainsworth said in a statement, after noting that his organisation had worked "closely with the Guernsey Income Tax Office and senior politicians to create a flexible but robust pensions system which not only meets the needs of Guernsey residents, but which meets the requirements of HMRC for QROPS transfers".
Ainsworth said it was "also concerning" that, despite advice given by GAPP and others in their response to the consultation on the April regulations, "HMRC has not recognised the many reasons why it may be entirely appropriate for Guernsey pension schemes to be open to non Guernsey members".
"Indeed, many local employers will have a single pension scheme for their staff employed in the islands," Ainsworth said.
"We hope for an early resolution of this problem.”
‘Extremely disappointed’
Guernsey Finance, which promotes Guernsey’s financial services industry globally, also expressed its disappointment over HMRC’s decision.
“At the moment, the situation is very unclear, but we are extremely disappointed at what we have heard so far from HMRC," said Fiona Le Poidevin, deputy chief executive.
"Guernsey has always aimed to comply with HMRC’s regulations, and therefore ensure that we continue to provide schemes which satisfy the criteria for being QROPS."
Like others, Le Poidevin said it will be interesting to see if other jurisdictions are also to be affected.
“HMRC is updating its list of approved schemes tomorrow, and so it will be very interesting to see if only Guernsey schemes are impacted, or whether other jurisdictions will find that the further changes coming into effect mean that their schemes are delisted as well," she said.
“In terms of the 157E schemes, we understand it is likely that these will now not be considered compliant. However, what we have not heard from HMRC is on what basis they have made this decision, and what the implications will be not just for Guernsey but the QROPS industry more widely.
“We will be monitoring these developments very closely in the coming days and hopefully this will shed more light not only on the future of the QROPS industry in Guernsey but for all jurisdictions.”
Le Poidevin’s reference to "157E schemes" is to a new, “one-size-fits-all” pensions regime approved just weeks ago by Guernsey legislators in an effort to accommodate one of HMRC’s key concerns, as spelled out by the Revenue last December, when it unveiling a raft of proposed changes to the legislation governing the way UK pensions may be transferred abroad. The 157E regime treated Guernsey residents and non-residents the same, with no Guernsey tax due on benefits paid.
Amendments unveiled in December
In announcing its planned changes to the QROPS transfer regulations on 6 Dec, HMRC started the clock on an eight-week consultation period, and noted that the changes would take effect from 6 April.
