The decline in QROPS transfers is set to accelerate, due to the UK HM Treasury clampdown on the use of overseas pension schemes by individuals remaining in the UK and the introduction of flexible drawdown, SIPP provider A J Bell has predicted.
Information obtained by A J Bell from HM Treasury as part of a Freedom of Information request revealed that the volume of QROPS transfers had fallen from a high of 6,263 in 2008/9 to 5,659 in 2009/10.
A J Bell marketing director Billy Mackay said: “This change will have little impact on transfers to QROPS for individuals retiring overseas. The issue which clearly concerns the Government is the promotion of QROPS as a tax avoidance vehicle to individuals who have little or no intention of leaving the UK.
“The fall in the number of QROPS transfers provides evidence that changes to the UK pensions framework such as the reduction in the tax charge applied on lump sum death benefits from the funds of individuals over 75, and the introduction of flexible drawdown were already hitting the popularity of these transfers and we expect this to continue.”
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