About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Monday, November 18th, 7:42PM
rss
Latest Headlines

QROPS battle added complexity

QROPS advisers in New Zealand say the British Government is likely to want New Zealand to change its KiwiSaver rules, rather than back down itself.

Wednesday, June 17th 2015, 6:00AM

by Susan Edmunds

KiwiSaver providers have lost their QROPS status because they allow members to withdraw savings before the age of 55, in circumstances such as financial hardship.

That means that any money transferred into them from UK pension schemes could now be treated as an unauthorised payment and subject to tax penalties of up to 70%, 55% of which is borne by the saver.

This applies whether they are a migrant or a Kiwi who worked and saved in the UK.

The IRD is awaiting word on whether its negotiations with Her Majesty's Revenue and Customs (HMRC) have been successful.

But Alun Rees-Williams, director of Britannia Financial Services, said he did not expect HMRC to back down.

He said he expected New Zealand would have to introduce ring-fencing for QROPS transfers, for KiwiSaver schemes to qualify.

But that would mean that once savers transferred to a QROPS KiwiSaver scheme, they could not then switch to another non-QROPS provider.

Rees-Williams said the KiwiSaver change seemed intentional but many of the other tax changes introduced on April 6 were having unintended consequences on QROPS schemes.

Savers in defined benefit schemes must now get advice from an adviser with a pension transfer qualification when they want to transfer their savings to a new provider.

Rees-Williams said that meant New Zealand QROPS advisers would have to work with a counterpart in the UK to offer consumers advice on both ends of the transfer. "It's a change to protect consumers there but they had not really thought about how it will apply to offshore schemes. It's another layer of cost for the client."

The biggest change introduced in Britain this year was that savers with defined contribution schemes can now withdraw 100% of their savings when they reach 55 and do not have to purchase an annuity.

But non-European Union schemes do not yet qualify for this pension freedom, after the Government backtracked at the last minute.

They must, for now, continue to require 70% of the transfer value of British pensions to provide an income for life.

Tags: QROPS

« Ethical approach a business opportunitySovereign finally confirms intention to sell Select »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • When is a client really a client?
    “And this subtle upgrade to the understanding of a complaint. Which changes the ISO definition from an expression of dissatisfaction...”
    9 hours ago by JPHale
  • When is a client really a client?
    “Just released additional standards from the FMA. Record keeping potentially until 7 years after the death of the life...”
    9 hours ago by JPHale
  • When is a client really a client?
    “@ReganT interesting that the two life advisers involved with the code working group discussion are the ones being argued...”
    14 hours ago by JPHale
  • When is a client really a client?
    “In a previous reply I responded to the concept of payment as a trigger. I actually agree it’s not. While we don’t often...”
    1 day ago by regant
  • When is a client really a client?
    “Tash are you being deliberately obtuse? I didnt say you have to keep sending/giving disclosure every year, I said you have...”
    1 day ago by regant
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com