Malta has long been considered a destination of choice for those seeking QROPS transfers. Maltese pension schemes have been eligible for QROPS status on a case by case basis since a 2009 agreement with HMRC.
Maltese QROPS share many aspects with similar Guernsey schemes but it is important to note the differences.
The Maltese trustee remains legally responsible for any actions (or lack thereof) of the discretionary investment manager and therefore most QROPS trustees are extremely selective over which investment manager they appoint. The trustees also must ensure that the Maltese regulator’s diversification requirements are enforced although this is done through the invesment manager.
It is important to note that whilst in Malta pension commencement lump sums are taxable, pension income is up to a top rate of 35%. However, depending on whether the individual is resident in a jurisdiction with an applicable Double Taxation Treaty, Maltese tax on QROPS and overseas pensions can be reduced to zero.
In Malta there are two forms of taxation available to QROPS compliant pension schemes. If a QROPS is being taxed as a company then pension payments are considered trust distributions and are therefore not taxable if the member is a non-resident.