Transfers to Qualifying Recognised Overseas Pension Schemes (QROPS) are down for the second tax year in a row – to 9,700 transfers worth £1.22bn in 2016/17 – according to HM Revenue & Customs data.
Newly published figures from the government have shown transfers to QROPS hit an all-time high of 20,100, with a total value of £1.76bn, in the 2014/15 tax year but have been in decline since.
In 2015/16, transfers dipped by around one-third to 13,700, with a total value of £1.5bn, before falling further in the most recent tax year.
Old Mutual Wealth financial planning expert Rachael Griffin said she had known for some time the QROPS market was “maturing”.
She explained: “There have been numerous regulatory changes over the years that have made pension transfers to a QROPS more complex, such as the need to have a UK-regulated pension specialist approve transfer cases.
“The new 25% transfer tax charge will undoubtedly show in next year’s numbers, where we expect a further decline.”
She continued: “QROPS transfers are just one part of the jigsaw, however, and there are other wrappers advisers will use with their clients to help them meet their long-term retirement needs. With defined benefit pension transfer values still at record highs we expect the pension transfer market to continue to be strong.”
In December, the government confirmed it would bring the tax treatment of QROPS in line with UK registered pension schemes. From 6 April, 100% of the income received from a QROPS by an individual who is a UK resident for tax purposes is subject to UK income tax.
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