Boost in demand
As a result, Green expects the changes to “trigger a surge in the number of people seeking to transfer their pensions out of the UK before the new plans come into full effect.”
This is despite some providers admitting earlier this year that the UK’s pension freedoms have dampened appetite for Rops.
However, Paul Davies, director of bdhSterling (formerly Global QROPS), later revealed that despite the HMRC removing thousands of schemes from its pre-approved list since July 2015, the advisory firm specialising in Brits moving to Australia, has seen a dramatic increase in the number of clients wanting to transfer their pensions overseas.
Changes expected
John McCreadie, head of UK sales at Momentum Pensions, an international pension specialist which also owns a UK Sipp business, said changes to the rule governing Rops “provide yet more reasons” for the industry to work together to ensure overseas pension savings products remain the “cornerstone of pensions planning” for expats.
Referring to the UK’s plans to harmonise the tax treatment of income from foreign pensions, McCreadie believes that increasing the threshold to 100% in line with UK pension has been expected by the industry for some time.
“Whilst this potential measure reduces some lifetime allowance (LTA) planning opportunities, in reality, it relates only to income, which has been seen for some time as an anomaly,” he said.
Details of the reforms will be announced in the Finance Bill on 5 December.
