While UK expats residing in the US have had access to QROPS in the past, the UK government has placed a 25% tax on QROPS transfers for anyone living outside the EEA as of March 2017. This is why, transferring UK pension to US via QROPS is not possible. Another important thing to note is that the US have no QROPS provider listed by the HMRC, which means that you cannot transfer your UK pension to US and put it in a QROPS pensions wrapper.
In one of our YouTube videos below, our CEO, and Independent Financial Advisor, Dominic James Murray, explains the current states of QROPS, Malta QROPS and how the rules of QROPS has changes over the years.
QROPS Malta Rules Changes
QROPS rules have changed quite a lot over the course of the years. Generally, these rules have mainly come from HMRC who are looking to water down the benefits of QROPS. Possibly, it could be argued with the fact that they don’t necessarily want every single British person or every single person living outside the UK to moving out of their UK SIPP, considering all the companies that make money from the UK SIPP such as the fund managers, the actuaries, the lawyers, the accountants, all the PAYE companies who pay money on an ongoing base or pay taxes on an ongoing basis. Generally speaking, the UK government is making QROPS rules stricter and less advantageous for clients from time to time.
Inline with the HMRC, we also observed the perspective of one of the biggest QROPS market in the world, Malta QROPS. From what we have learned, in terms of QROPS rule changes, Malta have perhaps wise up a little bit compared to the early days. This is following the decision of HMRC which delisted most jurisdictions from the HMRC QROPS list.
The reason for the delisting is because they were not following the rules of UK government, such as minimum access from the age of 55, ensuring that the asset is there to last for people’s retirement, and etc. By disobeying the rules, the HMRC presume that the quality of advice which was being given to give advice to a Malta QROPS is rather bad advice, leading HMRC to delisting the jurisdictions.
Back to the early days of Malta QROPS, the fact that in the early days around five or ten years ago, there are many QROPS providers who are not qualified nor regulated to become a QROPS provider. The process was extremely easy, you submitted your terms of business to the QROPS provider in Malta, and then they will provide you with the terms of business, and you can start sending out clients to them.
You didn’t need to be FCA-regulated, you didn’t even need to have ever sat a financial qualification ever in your lifetime. It can be said that you could have been a car salesman today and the next day you decided to become a QROPS specialist in Spain, France, Portugal, Italy, and other EEA region. This happened a lot, you had people who are not very well-educated in finance industry advising you on what to do with your finances.
What this means is, back in the day, there was good advice and there was bad advice for QROPS transfer. However, it’s the bad advice surfacing into the media, and it has given a bad reputation to QROPS Malta as the jurisdiction.
The Current State of QROPS Malta
About two years ago, the Maltese authority started to tighten up very much in terms of who can give QROPS advice. A good example is the new rules in Malta state your financial advisor must be locally regulated in the country in which you are resident, as well as the designated country you’re getting away from.
A good example is an IFA being based in France, who has no regulation in France, but is advising a French client to invest into a QROPS-wrapper. If anything goes wrong, if there’s a complaint, where does the client go to, the client calls up? The client then will end up getting the answer “but you signed the paperwork here to say that you wanted to invest in this fund” from the trustee, which doesn’t help at all.
The Maltese government has had enough of this, and they’ve brought things much stricter to try to improve on the level of advice which is being given inside Malta QROPS to maintain the jurisdiction from being delisted and to provide clients with the best service.
The current state of QROPS Malta is even better than before. Every time a client completes a deal or a trade, you have to write what is the entry or exit charge and what is the ongoing TER (Total Expense Ratio) of the underlying fund. The QROPS providers will also verify whether there any commissions payable from that fund to the financial advisor.
This regulation basically cuts out a lot of financial advisors from being able to rip you off. Some might still be able to do it by choosing funds with 3,5% of TER, which pay the advisor 1% ongoing fees each year, plus probably the 1% additional charge for you goes to the IFA for being your IFA.
Considering all mentioned changes above, we all can see that the Maltese government made changes to make Malta QROPS as one of the most trusted and credible QROPS provider in the world.
Best QROPS Malta for US Resident
While wrapping up your UK Pension into a QROPS is currently not possible for US residents, we would like to share with you some of the best QROPS Malta providers who we have worked together with.
One of the most notable QROPS provider who is working very well in Malta that we are currently worked together with is the Trireme. We have to caveat, we’re not being paid nor affiliated with Trireme or other companies we mentioned here. We are just sharing our experience of what we deem to be some of the best providers of Malta QROPS.
Trireme were massively on top of their game. Some years ago, they were the go-to provider, and they were excellent over the course of time. The system that they have with them is just absolutely flawless in terms of clients onboarding. One thing we really like about Trireme is that they don’t have a central customer service, but they change it to a dedicated admin who will deal with your IFA.
Your dedicated admin will analyse your IFA’s company, previous cases, gets to know your IFA, where your IFA is based, the FCA number of your IFA, license, and etc. However, it is important to remember that just because someone’s good right now doesn’t mean they’re going to be good in 12 months time. Remember, always do your due diligence firstly and thoroughly.
Are you looking for a pension wrapper for US Resident? Get in touch with us and let one of our FCA-regulated IFAs help you with your needs. Book yourself for a free initial consultation with us on your convenience time, and we will get back to you.