Once a leading QROPS destination, Gibraltar had to suspend its QROPS industry in 2009 after concerns were raised by HMRC. The UK tax authorities were unhappy that Gibraltar’s tax code allowed for residents over the age of 60 to be taxed at zero percent.
However, the Gibraltar government are now seeking to pass legislation intended to allow the territory to once again offer QROPS products. The new QROPS rules will allow benefits from pensions transferred to Gibraltar to be taxed at 2.5 percent.
While existing occupational pensions will not be affected, a maximum tax free lump sum withdrawal of 30% will be allowed and there will be a minimum retirement age of 55.
All of these actions by Gibraltar are designed to engender good relations with HMRC with regards to QROPS. Gibraltar hopes once again to attract pension transfers from expats looking to take advantage of favourable offshore tax rates.
Another factor in Gibraltar’s favour is the fact that it comes under the EU’s jurisdiction when it comes to financial services regulation unlike rival QROPS centres such as the Isle of Man or the Channel Islands.
Gibraltar is also geographically close to many British expats who have chosen to lives in sunnier climes in the Mediterranean.