It may have slipped under the radar and happened relatively unnoticed, but just before Christmas HMRC removed all schemes from both France and Italy from the QROPS listing, a fact easily demonstrated by looking at the countries list on the HMRC website, where neither France nor Italy can now be seen.
Prior to this, my belief was that potentially the best advice for a British expat living in France who wanted to transfer a UK pension into a QROPS was to utilise a vehicle known in France as a PERP (Plan d’Epargne Retraite Populaire). Prior to their removal there were 11 such schemes listed, some from household names such as Aviva and Swiss Life. Of course what constitutes “best advice” is debatable and was certainly NOT what most British expats living in France have done, as the offshore advisory community are unlikely to suggest that line of advice, given they will almost certainly not have had Terms of Business with French PERP providers. [ There are potentially serious issues for French tax-residents who have transferred their UK pensions into other jurisdictions, such as Malta, Gibraltar or New Zealand, but I do not intend to go into that here. ]
However, this latest move from HMRC now prevents that course of action from being possible. As reported in the Financial Times on December 16th, the impact of this will not only affect British expats living there who wanted to move their pension holdings into France or Italy – it effectively blocks any capability for French and Italian expatriates in the UK being able to move their UK pension back to their country of origin when they choose to return home to live.
There are two aspects of this though that are particularly puzzling. First, there are still schemes from both Germany and Spain remaining on the acceptable QROPS list that would seem not to be largely different from the de-listed French and Italian schemes. Furthermore, the age within the PERPs in France when drawdown can commence is in fact 62 – which is higher than the HMRC requirement of 55 years.
It is not at all clear why this has been decided, but when asked for clarification HMRC have replied only to say that, ‘We do not comment on identifiable schemes or jurisdictions’.
This now leaves British expats in France or Italy, or those intending to move there, unable to take their UK pension with them so an alternative course of action will need to be taken, such as utilising the Gibraltar / Malta styled schemes – or simply leaving the pension to remain in the UK. In a sense, what has happened here is that the generally poor advice on QROPS that British expatriates living in France have been receiving for several years now – to move their UK pension to say Gibraltar or Malta – has now become the most likely outcome. Given the new flexibility of UK pensions, it could be a good time for those that have been persuaded to move to places like Gibraltar and Malta to have that advice reviewed.