Brexit was always going to come with a whole host of difficulties, from importing and exporting goods, to supply chain disruptions and immigration headaches.
This was especially true for financial services because it was not included in the agreement until March 2021.
But the trade deal excludes Gibraltar, meaning there are still some grey areas for the financial advice and pension sectors in the British Overseas Territory.
To understand what the situation is like on the ground, International Adviser spoke with Lynda Martin, technical services manager at STM Fidecs Life, Health and Pensions in Gibraltar, and deputy chair of the Gibraltar Association of Pension Fund Administrators (Gapfa).
She said: “At STM, a great deal of work was done across the group to prepare for the potential impact of Brexit – so while it is, of course, a significant development, the transition to the post-Brexit era has gone smoothly from STM’s point of view.
“From a pensions perspective, we haven’t really seen huge changes. HM Treasury amended regulations at the start of this year to allow transfers to continue to Gibraltar providers without the application of the Overseas Transfer Charge.
“That maintained the status quo from a UK tax perspective in relation to Qrops, and it’s a positive move because it means we can continue to accept business from EEA, UK and Gibraltar residents.”
But Martin said that it is still unclear whether EU regulators will have issues with member state residents transferring to a Gibraltar-based Qrops.
As a result, Gapfa has raised concerns with the Gibraltar government to understand what the landscape will be like going forward, and whether there will be resistance from European watchdogs.
“The situation may become clearer when the Financial Services Agreement between the UK and EU is published – but as Gibraltar was excluded from the trade deal there may still be some uncertainty even after the agreement is published,” she added.
“Gibraltar has seen an influx of high net worth individuals – mostly from Spain and the UK – looking to benefit from the benign tax position in Gibraltar.
“It’s a trend that may have been influenced by the impact of the International Tax Agreement between the UK and Spain in regard to Gibraltar, which came into force in March this year.
“This creates an opportunity for STM to increase its presence in the qualifying non-UK pension schemes (Qnups) market and we are adapting our existing products to offer more flexible solutions.”
Gibraltar’s Private Sector Pensions Act (PSPA) came into force on 1 August 2021.
It means a wider range of products will be introduced to the market.
“These will complement our existing local and international occupational pension schemes,” Martin said. “STM and Gapfa are seeking clarity on some grey areas regarding how PSPA may affect existing schemes, clearly, we want as little disruption as possible.
“In Gibraltar’s pensions sector – and within other jurisdictions – there are still a few grey areas relating to Brexit that are in the process of being resolved but, overall, the major challenges posed have been addressed,” she added.