Plans announced by Chancellor Philip Hammond in the Autumn Statement to bring QROPS and other overseas pension transfers into line with UK pensions will spark a “surge” in overseas transfers believes a leading offshore advice firm owner who supports the tightening up of the rules.

Nigel Green, the found and chief executive of the deVere Group which provides offshore financial advice to thousands of clients, forecast that there would be a rush of people looking to transfer UK pensions overseas before the rules change. He supports the government’s plans to bring the tax treatment of overseas pensions more closely into line with the UK’s domestic pension tax regime because he believes it will improve the reputation of QROPs.

The Treasury is set to take a much tougher approach to overseas pension transfers in future and Mr Green forecast that the changes announced in the Autumn Statement would “trigger a surge” in the number of people seeking to transfer their pensions out of the UK before the new plans come into full effect.

Mr Green, commenting after yesterday’s Autumn Statement revealed that Qualifying Recognised Overseas Pension Schemes’ (QROPS) tax rules are to likely to become more closely aligned with UK pension schemes’ rules, said he believes the rule change, seen by some as negative for QROPs schemes, will help cut down on abuse of QROPS rules which allow UK pension holders to transfer their pension overseas.

Mr Green said: “Under the government’s latest plans, QROPS will be taxed in the same way as a UK pension for anyone who then later returns to the UK. Currently only 90 per cent of income from a QROPS is subject to income tax, as opposed to 100 per cent in a UK pension scheme. In addition, the member payment provisions will extend from five to 10 years, plus the eligibility criteria for a scheme to be listed as a QROPS will be tighter.”

He continued: “I welcome the government’s plans as they will help ensure that QROPS are not misused and/or mis-sold. QROPS are designed to provide an income in retirement for those permanently living outside the UK or planning to do so, as well as to offer all the many associated financial benefits of having an HMRC-recognised pension scheme based in a jurisdiction outside the UK.

“I welcome this move to update the QROPS rules. It means that clients are even more protected, making QROPS an even more attractive option.”

He added that the move highlighted that QROPS still keep the same standards or equivalent as UK pensions, that they are fully part of the retirement planning ‘establishment’, and the deployment of more and more of government resources demonstrates that the market is well governed.

Mr Green said he would “champion” the suggested tightening on eligibility criteria. He forecast this would prevent jurisdictions who are failing to meet the stringent requirements demanded by HMRC from bending the rules; “while other jurisdictions, including Malta, the Isle of Man and Gibraltar, which are fully compliant with HMRC rules and standards, will benefit from this.”

Mr Green added: “As the world becomes ever more internationally mobile, international pension planning is, of course, by default, an enormous growth area. As such, I welcome the plans to make the overseas pension transfer market even more robust.”