Many Kiwisaver QROPS Schemes Delisted
If you are transferring your pension to a Kiwisaver Scheme in NZ, you need to check if the Kiwisaver scheme you are transferring to is QROPS compliant. Most won’t be as they allow you to access a pension under 55 if in ill health or for a house purchase which HMRC won’t allow.
If you don’t stop the transfer, you could face a 55% tax charge on your pension.
HMRC have taken off 23 NZ Kiwisaver QROPS schemes from its QROPS list which is updated regularly. We have already spoke before about how both Australian Super schemes, Aussie SMSF’s and New Zealand Kiwisaver schemes may have problems being QROPS compliant due to strict UK pension rules which means clients can only access their pensions before 55 on death or incapacity.
Now, we have seen the fallout already. There are now only 34 Kiwisaver schemes which are Recognised Overseas Pension Schemes (QROPS). HMRC recently added as a statutory instrument that a pension cannot be taken before 55. Whether this was purposely to stop pensions being transferred or just an overlooked rule, we don’t know, but I suspect the latter. NZ and Australian schemes are angry that they were never consulted.
Both NZ and Aussie Supers have allowed pensioners to access their pensions if they are ill or face economic hardship, something which is not allowed under UK rules. It seems that HMRC are closing more and more doors to allow UK pensions to leave the UK. HMRC may be worrying about UK government debt levels and now want to make sure your UK pension is being taxed in the UK. Either that or the statutory instrument introduced wasn’t thought through properly.
Anyone who is in the process of transferring to a non-compliant QROPS NZ scheme must stop their transfer now and look at another option.
Which Schemes are QROPS Compliant in NZ?
Popular QROPS NZ Schemes on HMRC List 2015
Some of the original schemes which were written with UK QROPS clients in mind first and NZ residents second are still there on the list.
Britannia Superannuation Scheme 2012 New Zealand
Brooklands (NZ) Superannuation Scheme No.1 New Zealand
Brooklands (NZ) Superannuation Scheme No.2 New Zealand
Fidelity Super -Super Plan Number 3 New Zealand
NZ Endeavour Fund
We recommend to transfer your pension to these NZ QROPS compliant schemes and stay away from the Kiwisaver NZ schemes which may not be QROPS compliant and may attract a 55% tax charge.
Kiwisaver pension schemes were set up by the New Zealand government in 2007 and allow early access if you are seriously ill and also allows first-time buyers to finance property purchase. A QROPS on the other hand won’t allow withdrawals before 55 and cannot be used to purchase residential property.
So, these Kiwisaver QROPS schemes have been delisted as they are not “qualified” to be an overseas pension scheme under HMRC rules.
As always, every case is unique and you should seek the advice of QROPS Specialists. Please fill out the contact form and we can find the cheapest NZ QROPS to suit you.