Isle of Man QROPS Information

Isle of Man QROPSDuring the big clear out of QROPS from the approved list in early 2012, Guernsey was the biggest loser with more than 300 QROPS falling off the list. The Isle of Man also lost approval for some scheme, but has generally been more resilient because its QROPS offering was more of a mixture than the homogenous Guernsey model.

The Isle of Man ones that were cast off the list were known as 50C schemes. They tried to pay more than 75% of pension schemes as tax free lump sums. HMRC deemed that QROPS should be more like UK pensions, and that these empty arrangements were more like tax avoidance ruses, specifically designed to allow expats to transfer their UK pensions away from the United Kingdom without a tax charge, and then get the majority of their money without paying any tax anywhere. This was said to be against the spirit of QROPS, which are meant to be “normal” pensions, just in a foreign setting.