According to the life office’s findings, the top three preferred jurisdictions for Qualifying Recognised Overseas Pension Schemes are the Isle of Man, as voted for by 32% of advisers, Gibraltar, chosen by 26% of advisers, and Malta, voted for by 22% of advisers.
In a statement accompanying the research, Skandia said: “The Isle of Man was the clear leader, and has been offering QROPS since April 2006. QROPS are known in the Isle of Man as ‘1989 tax approved schemes’, where potential income tax and a tax on death apply.
“The Isle of Man jurisdiction is well known by advisers and clients as an international financial centre which could explain its popularity.
"Arguably the three jurisdictions named above have benefited from the demise of Guernsey as a recognised jurisdiction for QROPS, as the tax benefits offered in Guernsey were previously more tax advantageous compared to most other jurisdictions.”
Gary Boal, managing director of trust company Boal & Co., which has a QROPS in both the Isle of Man and, more recently Gibraltar, said: “These results bear out our own research and shows that the IoM has a compelling proposition in the pre-retirement QROPS market – the biggest part of the present market.
“It also shows that, in the space of less than a year, Gibraltar has come from nowhere to become a very strong QROPS centre; indeed post-retirement, Gibraltar has a compelling tax story.”
Boal added that both jurisdictions are “well ahead of Malta in the issues that are most important to clients and their advisers”.
Increased use of QROPS
The research also revealed almost half of advisers who had recommended the use of QROPS planned to increase their usage of the products over the next 12 months, while a further 41% intend to maintain their usage level over the same period.
Rachael Griffin, head of technical marketing, said: “Over the last three or four years the market has seen tremendous growth in the QROPS market, and it looks like this growth phase still has some way to go. The rise of the baby boomer and those looking to retire overseas could be fuelling this popularity, so too could an increased awareness amongst advisers for QROPS and the significant advantages they can offer their clients.”
Skandia said the increasing popularity comes despite a “backdrop of changing reporting requirements for QROPS providers, introduced as part of the Finance Bill 2013”.
The company added that, in fact, advisers “continue to recognise the significant advantages QROPS can have in terms of their flexibility and tax efficiency”.