As the summer season draws to a close, and autumn waiting in the wings, this is the season when everything comes alive with vivid colours of yellow, gold, red, rust, orange and green, making it a feast for the eyes and soul.  If you are thinking of moving to New Zealand, then this is the best time of the year to do so.

QROPS New Zealand jurisdiction has for a long time been viewed as a jurisdiction of choice for a Qualifying Recognized Overseas Pension Schemes (QROPS), offering an incredibly simple and tax efficient solution for many UK pension holders who have chosen QROPS New Zealand jurisdiction as their preferred choice for a pension transfer.  It also ranked number one out of all countries for the best “expat experience” in a survey conducted in 2014.

QROPS New Zealand jurisdiction has the ability to take 100% of the fund resulted in many transfers.  However, this was unacceptable to Her Majesty’s Revenue and Customs (HMRC), who changed legislation to bring New Zealand in line with other jurisdictions.  Meaning that they had to adhere to the 70% rule (70% of the fund must be income for life).  Nevertheless, as from 6 April 2015, QROPS New Zealand jurisdiction may if they wish pay out up to 100% of the pensions for those aged 55 or over, placing New Zealand, once again in an advantageous position.

There are two distinct types of QROPS New Zealand Jurisdiction

• Regular New Zealand Superannuation Scheme
• KiwiSaver scheme

Regular New Zealand Superannuation Scheme

These are pension models recognized with the Financial Markets Authority (FMA) as a superannuation scheme in New Zealand that has been approved by HMRC as a QROPS.

KiwiSaver Scheme

KiwiSaver schemes are only open to New Zealand residents (a UK pension holder living in New Zealand (of any nationality)).  Or New Zealand nationals with a UK pension living overseas.

While the Kiwisaver scheme has been successful with most working aged New Zealander’s enrolled in KiwiSaver scheme, it can be fraught with danger – as not all KiwiSaver schemes are QROPS.  For instance, if the payment is unauthorised and is reported to the HMRC the HMRC can levy member payment charges.

In particular, if the saver moves to another country, a KiwiSaver scheme cannot be transferred, it must be withdrawn in full, thus creating problems for those who are deemed to have taken an unauthorised payment.   Unauthorised payments result in penalties of up to 40% of the payment with an additional 15% charge if the payment is 25% or more of the value of the funds.

There are other reasons why KiwiSaver schemes are not an ideal end investment option for UK pension transfers, for instance:

• The schemes do not offer pound sterling investment options.
• KiwiSaver schemes are not actually administered as a QROPS, and are therefore less likely to keep up to date with the rule changes in QROPS.
• A well established QROPS will designate that 70% of the transferred value of your funds must be used to provide an ‘income for life’ with a minimum early retirement age of 55.

So on balance, there are few situations where an adviser would suggest the best course of action be a KiwiSaver scheme as opposed to a New Zealand Superannuation scheme, but clearly there is a market for them.

GC QROPS are completely independent, and can provide extensive insight and advice on QROPS New Zealand jurisdiction.  We are not tied to any single provider, which means that we will recommend the scheme which meets your exact requirements and needs.  Please contact us at QROPS@msn.com or call us on +34 698 243 745 for more information.