The Overseas Transfer Charge rules have been changed to remove EEA, UK and Gibraltar exemption, to prevent UK residents from using QROPS to take higher levels of tax-free cash, buried in another UK Budget 2024 pension update.
Isle of Man-based QB Partners managing director David White said Malta and Gibraltar based QROPS have long been used for UK and EEA residents to transfer their UK pensions to in relevant circumstances, for example to protect from double taxation, to provide portability and/or for non-UK retirees to access benefits in their local currencies.
Since the abolition of the Lifetime Allowance in April, they have also provided an opportunity for higher tax-free cash in some circumstances.
White further said: "The removal of the relevant Overseas Transfer Charge exemption, which allows UK or EEA residents to transfer to EEA or Gibraltar based QROPS without a 25% tax charge, will prevent UK residents and non-Malta/Gibraltar residents from transferring to Malta/Gibraltar QROPS in most cases."
This change has been implemented with immediate effect as from 30 October 2024.
Details of the government statement on this are here.
