Spectrum group presentation spain june 2011

Spectrum group presentation spain june 2011

• 1.
  Jason Gaines InternationalBusiness Development Manager Close International – Isle of Man QROPS
• 2.
  Her Majesty’s Revenue& Customs (HMRC) introduced a series of changes to the UK pensions system from 6 April 2006 – known as “A day”. These changes came about as a result of an EU directive - OPRP Directive 2003/41/EC The overhaul included withdrawing the existing agreements for the transfer of UK pension rights to overseas schemes and meant that, in effect, this would only be possible if the receiving scheme was recognised by HMRC as a QROPS. The Close Guernsey Personal Retirement Plan qualifies under the HMRC guidelines as a QROPS scheme. The Close Guernsey Personal Retirement Plan meets approvals afforded by Section 157a, subsection 4 of the Income Tax (Guernsey) Law 1975, as amended. The scheme manager has given HMRC notification that it is a recognised overseas pension scheme and has provided any such evidence that it is a recognised overseas pension scheme as HMRC may require. The primary requirement of the Close Guernsey Personal Retirement Plan in relation to its QROPS status is that it must accept both International and Guernsey resident members but cannot, at this time, accept US or Canadian citizens. What is a QROPS?
• 3.
  Requirement to purchasean annuity is to be abolished in full from April 2011; There will be no tax charge on death for uncrystallised funds until age 75, where it becomes 55%; A tax charge of 55% will apply on death for crystallised pension funds (removal of ASP rules); Reduction in the Life Time Allowance from £1.8m to £1.5m (w.e.f. April 2012); The annual allowance for tax years 2011/12 onwards will be reduced to £50,000 (from £250,000); Those with drawdown pensions who secure a lifetime pension income of £20,000+ a year able to access remaining funds as pension income without a limit on annual withdrawal (subject to their provider offering flexible drawdown pensions) subject to tax at highest marginal rate; Scheme must have 20+ members With effect from 6 April 2011, IHT will no longer apply to drawdown pension funds remaining under a registered pension scheme, including when the individual dies after reaching the age of 75; The minimum annual withdrawal amount from age 75 is abolished. For all ages the drawdown limits will be between zero and 100% of GAD rate (Government Actuary’s Department); Maximum GAD income drawdown limit reduced from 120% to 100% of the relevant amount. Finance Bill 2011 – Key Changes
• 4.
  QROPS Potential ClientBenefits Estate, domiciliary & succession planning No cap on value of transfer(s) or contribution(s) Tax planning Multi-currency – Sterling, Euro and US Dollar Diverse investment choice Competitive pricing Pension income paid without the deduction of income tax No capital gains tax or income tax charged on the assets within the Plan Consolidation of UK pensions in an offshore structure QROPS
• 5.
  Succession and EstatePlanning - Flexibility on the distribution of wealth after death; - Multiple beneficiaries via a range of payment options, annuity, a trust etc.; - Efficiency re speed of distribution and not part of estate, so good for families; - Income levels can be set anywhere between 0% and 120% of GAD pre-age 75; - Trust structure facilitates multiple distribution of options for estate planning (inclusion or exclusion) including payment to defined beneficiaries i.e. individual, a trust, life bond, another pension or estate; - IHT planning. QROPS Potential Client Benefits
• 6.
  The 5 YearRule – Reporting and Non-UK Residency Taxation Planning Benefits Succession Planning Benefits Investment Planning Benefits The Spectrum Group and Close Summary Note : Whilst Close is a provider of international wealth management solutions, these solutions attract different tax treatments in different countries. It must be noted that offshore companies of Close do not give tax or legal advice and applicants will be required to confirm that they have received their own appropriate advice (tax, legal or financial) before proceeding. Close relies on the applicant’s Advisor to guide them appropriately.
• 7.
  Close Trustees GuernseyLimited is licensed under the Regulation of Fiduciaries, Administration Businesses and Company Directors etc. (Bailiwick of Guernsey) Law, 2000 and regulated by the Guernsey Financial Services Commission. Its registered office is at Trafalgar Court, Admiral Park, St Peter Port, Guernsey, Channel Islands, GY1 2JA, registration number 5737. Close Trustees Guernsey Limited is part of the Close Asset Management group ultimately owned by Close Brothers Group plc. IH_6519_V1_22032011 Regulatory Notices