The UK changed the requirements for a fund to meet the criteria for a Qualifying Recognised Overseas Pension Scheme (QROPS) from 6 April 2015.
Under the new rules, QROPS funds must not allow for the release of funds before the UK minimum pension age (55), except in the event of ill health. Australian superannuation funds have difficulty meeting this requirement as several conditions of release conflict with this rule, including financial hardship, compassionate grounds and temporary incapacity. Additionally, funds are permitted to be withdrawn under age 55 where the client has excess concessional or non-concessional contributions.
Australian super funds were asked to confirm to HMRC whether they meet the new QROPS requirements by no later than 17 June 2015.
However on 1 July 2015, HM Customs and Revenue published the ROPS (Recognised Overseas Pension Scheme) list, which only listed one Australian superannuation fund as qualifying as QROPS – a Local Government Superannuation Scheme.
HM Customs and Revenue have commenced writing to Australian funds that were previously QROPS advising the fund that it no longer qualifies.
Australian Treasury is currently negotiating with the relevant UK authorities to obtain an exemption for transfers that occurred after 6 April 2015 and to allow for these transfers to resume in the future. At this stage the result of these negotiations are unknown.
Stuart Long – Client Services Manager