QROPS - Administrator ceased trading

snikpoh

Five years ago I moved to Spain and after 6 months decided to QROPS my (small) pension pot. I needed to do it quickly to get the 30% cash out of the fund before I was over 50 and the rules changed (now age limit of 55). I would then be able to draw the remaining 70% once I had been out of UK for 5 consecutive (UK) tax years (which will be April 2012).

I contacted a company who advised using Southern Star in New Zealand.

All was fine 'till I read this weekend that they had 'ceased trading' on 30th June this year. No one from Souther Star have been in contact!

I have now been told that I have two options but that these are only available after accounts have been provided, audited and accepted by New Zealand (expected to take in excess of 4 months).

Option 1 - have the fund transferred to a bank account but risk HMRC demanding tax in excess of 55%

Option 2 - transfer the funds to another QROPS scheme

Option 2 sounds fine but given that I would be able to draw all of the funds in April next year, this means that they would only be in the new scheme for a month or so. I guess also the costs would be quite high.

What should I do to get my money? I feel I was mis-advised and should have left the money alone (hey-ho!)

dunstonh

Option 1 - have the fund transferred to a bank account but risk HMRC demanding tax in excess of 55%

Big risk of that happening as HMRC has QROPs abuse as a hot potato.

I feel I was mis-advised and should have left the money alone (hey-ho!)

Now you know why most of us here issue warnings like this about these schemes.

casterman

Southern Star have not ceased trading. They have decided not to renew their QROPS status. Any money left in their QROPS funds will be subject to the NZ financial regulator rules and regs so it will be completly safe and secure.

What to do with it is up to you. I have had 2 pensions go through Southern Star and they have been brilliant with me.

Cook_County

snikpoh wrote: »

Five years ago I moved to Spain and after 6 months decided to QROPS my (small) pension pot. I needed to do it quickly to get the 30% cash out of the fund before I was over 50 and the rules changed (now age limit of 55). I would then be able to draw the remaining 70% once I had been out of UK for 5 consecutive (UK) tax years (which will be April 2012).

I contacted a company who advised using Southern Star in New Zealand.

All was fine 'till I read this weekend that they had 'ceased trading' on 30th June this year. No one from Souther Star have been in contact!

I have now been told that I have two options but that these are only available after accounts have been provided, audited and accepted by New Zealand (expected to take in excess of 4 months).

Option 1 - have the fund transferred to a bank account but risk HMRC demanding tax in excess of 55%

Option 2 - transfer the funds to another QROPS scheme

Option 2 sounds fine but given that I would be able to draw all of the funds in April next year, this means that they would only be in the new scheme for a month or so. I guess also the costs would be quite high.

What should I do to get my money? I feel I was mis-advised and should have left the money alone (hey-ho!)

I am confused why or where this saves tax? Presumably the entire fund has always been fully taxed in Spain all along and declared annually on your Spanish tax returns?

gfplux

Hello snikpoh,
I really hope you are going to be OK.
I would love it if QROPS was safe, secure and properly regulated. I have been sitting on the fence about this for three or more years and I am no closer taking the QROPS route than I was when I first heard about them.

robmatic

snikpoh wrote: »

Option 1 - have the fund transferred to a bank account but risk HMRC demanding tax in excess of 55%

Option 2 - transfer the funds to another QROPS scheme

Option 2 sounds fine but given that I would be able to draw all of the funds in April next year, this means that they would only be in the new scheme for a month or so. I guess also the costs would be quite high.

What should I do to get my money? I feel I was mis-advised and should have left the money alone (hey-ho!)

You could be a bit snookered if as rumoured the NZ authorities start restricting 100% withdrawals.

Was your adviser based in Spain rather than the UK?

pforma1

NZ QROPS are in a state of flux:

(google international adviser and new zealand qrops)

IoM is certainly ahead of the game (and importantly pensions regulated) when looking at QROPS now with the new 50c legislation that was passed last year.

(google wikipedia and 50c qrops)

Certainly would be where I would look if I was transferring my frozen UK pension or an existing QROPS.