Expat QROPS at risk as HMRC delists Canadian schemes

Published:  9 Dec at 6 PM
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A Canadian QROPS provider hard hit by HM Revenue and Customs’ delisting of a large number of expat pensions is claiming the regulator has accused local providers of breaking the rules.

Canadian QROPS provider Mackenzie’s business is threatened by HMRC’s placing of all but three of Canada’s QROPS funds under review, thus freezing millions of dollars’ worth of savings until January at best. Mackenzie’s decision to break silence on HMRC’s reasons for the delisting was caused by the regulator’s claim that Canadian pensions are deliberately breaking QROPS rules.

At present, the only QROPS now available in the country are three pensions issued by the Bank of Montreal. The rest of the providers are suspected of having allowed savers younger than the required 55 years to transfer their pensions to QROPS, thus breaking the rules.

According to Mackenzie vice-president Carol Bezaire, the firm, as do the majority of other Canadian QROPS providers, makes special provisions for QROPS based on former UK pension savings, assigning them a special number to make identification easier. Access to these accounts, she said, is disallowed to any client under the age of 55. However, Bezaire added she was aware a few British expats had switched to Mackenzie QROPS and had attempted to persuade the company to ignore the age ruling.

Canadian QROPS have been available since 2006, with demand peaking in 2014 at 101 listed QROPS. Their popularity is believed to have grown along with that of the country as a chosen retirement destination for Britons. From the heights of 2014, the number of QROPS available fell to around 52 by last month, with HMRC’s decision leaving just three.

The British regulator has refused to give any explanation or comment as regards the freezing of the 49 QROPS and, should the schemes not be re-listed, expat retirement savers will have little option but to either stay, losing associated tax advantages and risking tax penalties or go through the process of finding another suitable offshore scheme within three years of the delisting.
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