Close International Warns Expats After Gains Cooper Case

Close International Asset Management is warning British expatriates to review their pension arrangements in the wake of the Robert Gains Cooper case.

As reported in International Adviser last week, the Court of Appeal ruled against expatriate Gains Cooper in favour of HM Revenue & Customs stating that he remained eligible for UK taxes even though he had lived in the Seychelles since 1976.

Rex Cowley, head of marketing at Close, said: “For many expatriates the move to a different country is followed by the change of domicile in order to simplify their tax affairs. However, it would seem many expats still have UK pension contracts; be these defined benefits or defined contribution schemes.

“Certain sectors within the advisory community believe the extent to which many clients have gone with regards to shaking off their UK domicile is not significant enough, particularly if they still have pension assets in the UK. Whilst a Qualifying Recognised Overseas Pension Scheme (QROPS) may have been discounted in the past by the client or their advisor, the above ruling is causing expatriates to reconsider this decision.”

Cowley says using a QROPS can provide a solution to the problem faced by expatriates as well as giving the additional benefit of not having to purchase an annuity at the age of 75 and avoiding the high levels of taxation associated with an alternatively secured pension on the death of the member.

“Either way, the Gains Cooper case shows financial planners advising expatriates who wish to or believe they have lost their domicile need to consider not only the situs of their clients’ assets and/or income, but also their clients’ behaviour patterns and the associations they hold with the UK in order to facilitate a true transition,” added Cowley.

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