QROPS Hong Kong PRESS RELEASE Latest QROPS Developments

1. Financial Partners Ltd. Tel +852 5307 3732
Financial Partners Ltd.
3708 The Center Tel +852 2827 1199
3708 The Center
99 Queen's Road Central Fax +852 2827 0270
99 Queen's Road Central
Hong Kong www.financial-partners.biz
Hong Kong
PRESS RELEASE URGENT
Changes to Qualifying Recognized Overseas his total pension fund – all, currently, in accordance
Pension Schemes – Can seriously with HMRC rules.
enhance your wealth
In contrast; if James had kept his pension in the UK
If you have a UK pension scheme or a UK pension (or currently if he transferred to a QROPS under
policy, and you have been (or will be) a UK non- Guernsey’s jurisdiction) his maximum lump sum
resident for at least 5 complete tax years; then recent would have only been 25% of his fund, some
changes in QROPS legislation can seriously enhance £150,000.
you wealth.
So, currently, Boal and Co’s “Trinity” QROPS
For example: Most UK money purchase pension allows James – in accordance with HMRC rules – to
schemes (Personal Pension Schemes (PPP)) are only take a lump sum which is say in this example some 3
permitted to pay 25% of the underlying pension fund times larger, and all tax free.
in the form of a (tax free) lump sum. However, Boal
and Co’s “Trinity” QROPS is subject to different Furthermore; as opposed to a UK resident who when
HMRC rules that relate specifically to QROPS, which they retire with a UK PPP scheme, the maximum tax
can permit a much larger lump sum withdrawal. As a free lump sum would be restricted to 25% of the
consequence the maximum (tax free) lump sum underlying fund value. The important point is that
withdrawal is 30% of the underlying pension fund. under the new arrangements you can potentially
receive more TAX FREE cash from your pension
In addition: Changes To Qualifying Recognized arrangements.
Overseas Pension Schemes (QROPS) – Can
seriously enhance your wealth The TAX FREE cash is released from your pension
arrangements for you to utilise as you wish.
For example; James who is 45, transfers a total of
£200,000 (all non-protected rights) into a Boal and CLEARLY THIS IS OF
Co’s “Trinity” QROPS, from his UK pension GREAT VALUE TO YOU
arrangements. This can be from a personal pension
scheme or an occupational pension scheme; or a Boal & Co welcomes
combination of both. HMRC 50C QROPS confirmation
When James reaches say age 65, and is thinking of Leading QROPS provider Boal & Co welcomes
retiring his Trinity fund has grown to say £600,000. confirmation that HMRC has concluded that a
Being non-UK resident for 5 plus years, James is only scheme approved under the new 50C legislation ‘can
required to take a pension with £140,000 of his satisfy the requirements to be a recognised overseas
accumulated Trinity fund (this represents 70% of the pension scheme’.
“Original” transfer amount of some £200,000) the
excess over this £140,000 can be paid to him as a “Tax Trinity was tax-approved under the Isle of Man’s
free” lump sum amounting to some £460,000. ‘section 50C’ legislation on the same day that the
new Manx legislation took effect in October 2010,
So his maximum lump sum in this example is 75% of and has been registered as a QROPS ever since.
www.wealthmanagementhongkong.com Page 1 of 2

2. Financial Partners Ltd. Tel +852 5307 3732
Financial Partners Ltd.
3708 The Center Tel +852 2827 1199
3708 The Center
99 Queen's Road Central Fax +852 2827 0270
99 Queen's Road Central
Hong Kong www.financial-partners.biz
Hong Kong
For Further Information Contact Gary Williams 852 5307 3732
Boal & Co has been very much at the vanguard of the lump sum.
50C initiative and Trinity is the first ‘designer’ • They remove your money from the punitive UK
QROPS of its type. Managing Director Gary Boal HMRC tax regime.
explained: • They offer the widest possible investment
options.
‘At first, when we revealed with Trinity exactly what • They provide GROSS Income.
the relevant UK and Isle of Man 50C legislation • Benefits are available from age 55.
provides for in relation to QROPS pension transfers, • No requirement to purchase an annuity on
there were several individuals who could only respond retirement or at any other time.
by seeking to cast doubts on the efficacy of the 50C • Greater flexibility in how you take income from
legislation. In actual fact, some of the highly the underlying fund.
innovative features of Trinity, including the absence of
• The underlying investments grow in a tax-
the traditional age 75 vesting requirement, have since efficient environment.
been embodied into domestic UK pensions legislation
• Greater control over the investment of your
in the recent UK Budget.
underlying investment fund, with a wide range
of choices available to you.
‘Anyone who took the time to familiarise themselves
• Greater flexibility over the nature and timing
with the relevant legislation, as we (and our legal
retirement benefits.
advisers) had done, would quickly come to the
conclusion that the UK requirements in relation to the • The pension fund can be denominated in a wide
maximum pension commencement lump sum were range of currencies to suit you (this may reduce
actually quite different for QROPS to what the market currency risk).
had assumed. Specifically, the UK legislation requires • Exempt from the UK Lifetime Allowance;
that at least 70% of the transfer value paid into a currently charged at a rate of 55%.
QROPS has to be designated to provide a pension. • Wider limits on pension income levels.
This is quite different to the traditional QROPS • A particularly flexible contract where an
scheme which limits, quite unnecessarily, the lump extensive range of investments can be made.
sum to 25% or 30% of fund value. The 50C legislation • On premature death they forward ALL
is in some ways a carbon copy of the relevant UK remaining monies TAX FREE and importantly
QROPS legislation, importing UK pension rules into outside of your remaining estate to your
Isle of Man tax law, and it should therefore be no dependents for example your wife and children;
surprise to anyone that a 50C scheme will be capable or your chosen charity. This means that the
of satisfying the requirements. The Isle of Man 50C money is forwarded to the right people at the
legislation was always drafted to ensure that it fitted right time; and that the monies remain outside of
with the UK QROPS requirements”. your estate with regard to HMRC calculation of
any liability regarding Inheritance Tax at 40%.
Why a QROPS – there are also other potential • SALIENTLY A QROPS PUTS YOU BACK IN
benefits within a QROPS; these include CONTROL OF YOUR MONEY.
For further information on how a QROPS can
Now let me be clear; the advantages of a QROPS are: seriously enhance your wealth please contact Gary
• They provide a substantially larger TAX FREE Williams on +852 5307 3732
www.wealthmanagementhongkong.com Page 2 of 2