Concept Group, which is based in Guernsey and offers two main QROPS – Aurora Quantum and Aurora Libertai – said it was copied into a letter sent to a transferring scheme from the Isle of Man Treasury last month, which stated that a client was not be able to move his pension to Concept as he was not a Guernsey resident.
The letter went on to warn that transfers which are made without approval from the Isle of Man Treasury “constitute unauthorised payments and would be subject to an unauthorised payment charge of 20% and a supplementary charge of 20%.”
Roger Berry, managing director Concept Group, said he was surprised by the decision, particularly as the client in question is not resident in the Isle of Man either.
“Whilst any responsible trustee should consider a transfer request carefully, particularly if it is to a QROPS in a jurisdiction or to a plan that is perhaps acting outside the spirit of QROPS regulations, transfers to Guernsey are hardly contentious and Aurora QROPS about as vanilla as they come, so it would appear the motivation lies elsewhere,” he said.
“Blocking transfers out may seem like a good idea, but ultimately it is likely to be counterproductive as potential QROPS members of a jurisdiction get scared that, should they choose to, they cannot move to another jurisdiction. It brings new meaning to the phrase "a pension for life". The cause appears to be new Isle of Man legislation that came about in autumn last year and perhaps has not found its feet yet. We all hope that common sense will prevail and blocked transfers get unblocked. Ultimately, the reason stated by the Isle of Man tax office is hard to justify.”
However, an Isle of Man Treasury spokesperson said that the case in question would have unique circumstances which would explain its decision and said public guidance on fund transfers is available to read here. http://www.gov.im/lib/docs/treasury/incometax/pdfs/pn16510.pdf.
He added: “A transfer request is subject to Manx law and practice, with QROPS or forms of authorisation by other jurisdictions being only an aspect of the decision on approving the request or turning it down.
“The reputation and standing of the Isle of Man for both domestic and international pension business is very high and we have enhanced our offering with 50c, for example.
“At the same time, there have been some abuses in the pension world, and as a regulator we need to be aware of what people may be planning through various pension techniques and restrict them if necessary. A combination of good products provided by excellent advisers in a well-regulated country is the basis of our growing pension sector. A single case which will have a unique set of circumstances leading to a unique decision should cause no concerns to the sector.”
