Malta: An ideal choice for QROPS

Benjamin Griscti  -  20/September/2012

Malta meets the HMRC regulations for a UK Qualifying Recognised Overseas Pension Scheme (QROPS). This allows people who are no longer resident in the UK to transfer pension benefits accumulated in a UK recognised pension scheme to a recognised pension scheme in Malta (hence taxable at Malta’s beneficial tax rates – see below).

Why Malta?

In April, HMRC implemented new tax legislation that resulted in 300 Guernsey QROPS being removed from its list of approved schemes. This has resulted in 90% of Guernsey’s schemes planning to establish themselves in Malta in the wake of HMRC’s rules. Reasons for this:

  • Malta is not a blacklisted country and is not regarded as an off-shore jurisdiction;
  • Malta is a fully EU member state and hence is required to meet high class regulations also embodied in the UK;
  • Unlike countries like Guernsey and the Isle of Man, Malta has around 60 double taxation agreements with European countries, meaning clients would not be taxed in more than one country;
  • Despite not being an off-shore jurisdiction and being a full EU member state, Malta still offers highly beneficial tax rates. Personal income tax is charged at progressive rates up to a maximum of 35% as illustrated by the following table:

Married Persons 

Income (€)   Tax Rate
 0 - 11,900 0%
 11,901 - 21,200  15% 
 21,201 - 28,700    25% 
 over 28,701      35% 

Single Persons

Income (€)   Tax Rate
0 - 8,500    0%
8,501 - 14,500    15% 
14,501 - 19,500  25% 
 over 19,501      35% 

   

Malta meets the HMRC regulations for a UK Qualifying Recognised Overseas Pension Scheme (QROPS). This allows people who are no longer resident in the UK to transfer pension benefits accumulated in a UK recognised pension scheme to a recognised pension scheme in Malta (hence taxable at Malta’s beneficial tax rates – see below).

Why Malta?

In April, HMRC implemented new tax legislation that resulted in 300 Guernsey QROPS being removed from its list of approved schemes. This has resulted in 90% of Guernsey’s schemes planning to establish themselves in Malta in the wake of HMRC’s rules. Reasons for this:

  • Malta is not a blacklisted country and is not regarded as an off-shore jurisdiction;
  • Malta is a fully EU member state and hence is required to meet high class regulations also embodied in the UK;
  • Unlike countries like Guernsey and the Isle of Man, Malta has around 60 double taxation agreements with European countries, meaning clients would not be taxed in more than one country;
  • Despite not being an off-shore jurisdiction and being a full EU member state, Malta still offers highly beneficial tax rates. Personal income tax is charged at progressive rates up to a maximum of 35% as illustrated by the following table:


However, high-net-worth individuals (deriving pension income) can pay as little as a flat rate of 15% under certain circumstances.

For any queries about the aforementioned issue, kindly contact Mr Joseph Gauci (Managing Partner) at: jgauci@ksimalta.com or Mr Benjamin Griscti (Senior Advisor) at:bgriscti@ksimalta.com

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