The Superannuation Scheme Act of 1989 in New Zealand deals with pension related schemes like the QROPS New Zealand. The main concept of the QROPS is to transfer the UK pension money to the QROPS in order to receive a pension with annuity from 75 years of age. After the demise of the primary pension account receiver, the benefit is transferred to the nominated heirs without tax liability.
The benefits of the QROPS schemes that are receivable from UK or any other country are no match for the sizeable capital benefits from QROPS New Zealand. Many QROPS member countries have raised questions about the working of the QROPS New Zealand, but their misconceptions are misplaced.
There are certain tax conditions that must be fulfilled in order to enjoy the benefits of QROPS New Zealand. The first condition is that the QROPS scheme must be available for those who are residing within the territory or the country where the QROPS body has been established. The annuation scheme and Kiwisaver option are only available for people who stay in New Zealand.
Secondly, a lot depends upon the tax benefits the local people enjoy on pensions. So, QROPS New Zealand depends a lot on the pension structure of the country. Also, there are two conditions out of which the foreign scheme has to satisfy at least one. Condition A states that the pension scheme from a foreign country needs to be registered in the country where it is situated. QROPS New Zealand satisfies this criterion. Condition B on the other hand states that if the scheme is not approved or registered then there must be a cut of 70% of the pension to be given in the form of an income for life.
UK and New Zealand have entered into a double taxation agreement which includes rules such as non-discrimination and information exchange. The law in New Zealand does not allow investment of funds for members associated with QROPS. However certain investment options are allowed.
If any money is paid from QROPS New Zealand by a member who is not a tax payer or UK resident in a given financial year and previous years, then that payment can give rise to a payment charge which is authorized. Therefore, the QROPS jurisdiction varies from country to country and New Zealand's jurisdiction is different from other QROPS member countries.