Since April 2012, Malta has been open for QROPS business. So why would anyone want to transfer their pension to the new jurisdiction?
Firstly, Malta has approached the pension investment market with care and with caution. The consequences of a country’s pension schemes being delisted are serious, as Guernsey financial institutions found out earlier this year when 300 of theirs were deemed unsuitable.
If a QROPS is delisted its investors can find themselves lumbered with large penalties and tax bills.
So Malta has taken part in discussions with HMRC over a number of years to ensure that the pensions offered in its jurisdiction will be suitable. Its financial institutions and civil servants have had high level discussions with Treasury and HMRC officials to ensure that there are no slip ups.
Secondly, although it may be new to QROPS, Malta has a strong track record of a well regulated financial services industry. It has its own pensions regulator, but as a member of the European Union (and the Eurozone), investors in Maltese products also benefit from an added layer of protection without suffering from too much red tape.
The official business languages are English and Maltese, although given that the archipelago is home to people of many different nationalities you can realistically expect to be served in pretty much any language you choose.
What is so great about Maltese pensions?
In the same way that they have spent a long time talking to HMRC, Maltese pension providers have spent years talking to expats to find out what they want and what they need. They have also presumably been learning the lessons of what has happened in Guernsey. With a system of “programmed withdrawals”, expat investors in approved Maltese pensions can enjoy lump sums and an income stream at favourable rates of tax.
You do not have to be resident in Malta to have a pension there. The country has double taxation agreements with 60 countries and many more pending, so if you live in one of those 60 countries you can receive your pension payments gross of tax and pay where you are, depending on your circumstances.
Assuming that you have lived outside of the United Kingdom for at least 5 years, you can take up to 30% of the value of your fund from the age of 55.
Whether or not you would be prudent to do so is a matter on which you should seek sound professional advice. However, if your QROPS is somewhere flexible like Malta, you will have more choices about what to do with your hard earned cash.