UK votes to leave the EU: Pensions Update
Published: 24 Jun 2016
The results are still to be officially announced, but it is largely confirmed that the UK will exit the EU. The UK Parliament still has to enact legislation to facilitate the UK’s departure of the European bloc, and it is envisaged that there will now be a two-year window to deal with the exit, which commences with invoking Article 50 of the Lisbon Treaty.
The implications—positive or negative—have been both lamented and lauded across the media.
The potential implications for Pensions, via our various jurisdictions are as follows:
Malta remains a full member of the EU with effective Pensions legislation, meeting the HMRC ROPS requirements. The majority of ROPS jurisdictions are already outside the EU (e.g. Australia, New Zealand, Gibraltar, and the Isle of Man).
Malta is the only EU jurisdiction (other than the UK) within Momentum’s proposition.
As an ex-Crown Dependency, it is difficult to foresee that there would be any negative implications for Malta as a ROPS jurisdiction, due to the strength of its legislation and regulation.
HMRC allows EU Schemes to benefit from Flexible Access Drawdown. It is feasible that Malta could revert to GAD based benefits, mirroring the regime in place for Non EU Schemes, although this is pure speculation at this stage.
Malta’s range of effective Double Taxation Agreements remains in place.
Gibraltar is an existing Non EU territory. Schemes remain within HMRC ROPS requirements.
Of more relevance may be its ability as a jurisdiction to trade with the remainder of the EU, but in relation to Pension Schemes, these should not be affected. The Withholding Tax regime is already in place, having already been subject to HMRC scrutiny.
Isle of Man
As with Gibraltar, the Isle of Man is an existing Non EU territory. Schemes remain in line with HMRC ROPS requirements.
The Isle of Man was not part of the EU Referendum vote.
Via our range of SIPP products, the UK remains an attractive jurisdiction for both UK and non UK Residents. Flexible Drawdown remains in place.
No impact is envisaged in the UK.
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