OFF Shore QROPS- The best solution for India based UK expats/NRI’s

As for as OFF Shore QROPS is concerned ,the best solution for a resident of India Or India based UK expats , who have  accumulated UK pensions , is a QROPS based in Gibraltar & Malta. Below is the perfect reasons why India based UK expats/NRI’s should choose Gbraltar  OR Malta as their QROPS jurisdictions over others:

Gibraltar:

An offshore QROPS in Gibraltar  will continue to grow tax free. Gibraltar has been given UK HMRC approval in writing and income tax would be only 2.5%. If client is non-resident or has not been resident for 9 out of last 10 years from India, there will be no tax to pay in India. A lump sum of 30% can be taken at 55 and the plan can be valued in any major currency.

A QROPS is far more tax efficient than UK pension if resident in India. Tax liability with UK scheme will be 20%. Tax liability with QROPS in Gibraltar is only 2.5%. Also on death with a UK scheme the corpus is liable for a 55% tax charge. With a QROPS there is no tax on death.

Please remember that we would use a QROPS in Gibraltar/Malta for tax reasons but we would have an insurance company on the Isle of Man hold the corpus for protection reasons.

Malta:

In addition in Malta you can access lump sum and income at age 55 as long as client has been out of UK for 5 years..

On transfer to a Malta based scheme you will be able to withdraw an amount of 30% as capital from Malta at 55. After 3 years a further capital sum could be taken via a process called “Programmed Withdrawals”. After the 30% drawdown at age 55, after 3 years further capital can be taken every year. This is in excess to the annual GAD which can be taken every year from age 55. This can be taken in advance. Therefore at age 55 around 35% can be taken (capital plus annual GAD on 1^st day).

Malta relies on its double taxation agreement with India which has just changed. Earlier Tax used to be chargeable in Malta for pension income for Indian residents. Now however this has changed.

India / Malta DTA amendment attached showing the changes. Articles 18 (pensions) and 22 (other income) both now show only taxable in India.

http://www.financemalta.org/fileprovider.aspx?fileId=1614686

i.e- no tax in Malta, so income will be paid without deduction of tax and then it is down to the individual to declare the income If they want & moreover its all depends on where the client is tax resident. 

Both Gibraltar & Malta will be appropriate wherever resident in the world and continue to provide tax free growth and low tax income. On death the full corpus is transferred to clients spouse or other beneficiary. For any client who holds a UK pension the following is true. On insolvency of the underlying insurance company that hold his UK pension then the FSCS cover him for up to £50,000.

For any QROPS (Gibraltar/Malta) one can use  insurance company based on the Isle of Man (Crown Dependency of the UK). These are all the offshore division of UK insurance companies, such as Friends Provident International, Skandia, Royal London etc. Many use the Isle of Man for a number of reasons, first being that there is no tax on growth but secondly the Isle of Man has a investor protection scheme that covers individual investors pension corpus up to 90% of their investment with no upper limit. Therefore the protection available is greater.

Pension rates are 20% higher with QROPS, as QROPS just use a greater calculation of the UK GAD limit. This is the same with  Malta & Gibraltar.

FOR MORE DETAILS & STARTING UP OF THE TRANSFER PROCESS CONTACT:

Ravi Kumar

Financial Consultant

QROPS Advisor Group

M +91  9844519872,  +91  9980927393

Email:  ravi.sampige@gmail.com

Member’s who applied to get their NHS pensions transferred to a QROPS based in India , Australia etc., and got their transfer applications rejected, can now get their pensions transferred to an alternative QROPS in Malta, Gibraltar etc., before the deadline of 31st, January 2016.

NHS Pensions  has refused to allow  transferring pensions to QROPS in India & QROPS in Australia  for many reasons. For example, NHS refused to transfer pensions to many Australian QROPS, since those schemes were being de-listed from HMRC’s QROPS list as those schemes are no longer meeting new HMRC’s conditions i.e, effective from 6^th, April 2015. NHS also refusing to allow transferring pensions to QROPS in India despite the schemes are still being listed on HMRC’s website as a Recognised Overseas Pension Scheme (‘ROPS’) as  NHS interprets  rules of these schemes are also as not in line with new HMRC’s conditions that is effective from 6^th, April 2015.

Member’s had  applied to transfer their NHS pensions to QROPS in India, Australia etc., in good faith, as it was their understanding that the schemes met all the relevant conditions of a ‘ROPS’, including the pension benefit age test. However, if NHS interpretation of these rules are different, Or applied schemes got de-listed all of a sudden, then member’s  must be permitted to make arrangements to transfer their pensions to an alternative scheme which is acceptable to the NHS.

There is a good news for those aggrieved clients who desperately wants to transfer their NHS pensions to QROPS overseas. The department of health(UK) has recently agreed that members who had returned their fully completed option forms prior to the 6^th, April 2015 and subsequently had their chosen scheme removed from the list(also refused to allow transferring pensions to QROPS despite the schemes are still being listed on HMRC’s website as ‘ROPS’ as in the case of QROPS in India)can now select a scheme that meets all of the current legislative requirements of a ROPS as set out by the HMRC, including the new ‘Pension Benefit Age Test’ alternatively and get their pensions transferred .

But here is a catch. Those who wish to transfer their NHS Pension to an alternative scheme, they need  to put request before NHS immediately via email & and they need to  fill required forms  which is sent by NHS . The fully completed required forms need to be returned to NHS via the post before the 31^st January 2016. NHS has set deadline of 31^st , January 2016 to return fully completed forms.

The Centaurus Retirement Benefit Scheme, based in Malta (hereinafter referred to as the ‘Centaurus Scheme’) meets all of the current legislative requirements of a ROPS as set out by the HMRC, including the new ‘Pension Benefit Age Test’, and also that NHS has recently permitted transfers out to this scheme.

For One’s information Centaurus Scheme is also a defined contribution scheme, and that pursuant to the Pensions Act 2015, transfers from unfunded public sector schemes are restricted, except to other defined benefit schemes. However, since Member’s records shows  that the full set of pension transfer documents, as required by NHS, were submitted to the NHS in good time to meet the April 6 2015 deadline, and therefore there is no reason that this transfer to the Centaurus Scheme should not proceed.

Those member’s who applied to get their NHS pensions transferred to a QROPS based in India , Australia etc.,  and got their transfer applications rejected, can now get their pensions transferred to a QROPS in Malta, Gibraltar etc., before the deadline of 31^st, January 2016.

FOR MORE DETAILS & STARTING UP OF THE TRANSFER PROCESS CONTACT:

Ravi Kumar

Financial Consultant

ALEXANDER PETER WEALTH MANAGEMENT

M +91  9844519872,  +91  9980927393

Email:  qropstoindia@gmail.com

http://www.alexanderpeter.com/

PERSONAL FINANCIAL PLANNING

Before making investment plans,one shall make sure  that the following 7 essentials have taken care.

.

1)Adequate life insurance cover: 15*annual expenditure(annual income)+net liabilities

 One shall protect his family against the twists and turns by taking a basic life cover that is equal to15times of one’s annual expenditure+net liabilities

2)Medical cover: Adequate cover according to age & health. 

One shall be prepared for any exigencies by taking adequate medical insurance cover,keeping in mind health &age

3)Adequate cash at home:  1month expense

    Inevitable expenses always walk in uninvited! One shall       tide over these hurdles by always keeping hard cash equal to one month’s home expenses

 4)Adequate balance in savings account: 1months expense

   One shall work through this difficult month by always maintaining one months expense balance in savings account

5)Widley accpected credit card: Anytime 365*24*7

   One shall be prepared for unforeseen situations by having a credit card in hand.

 6)Emergency reserve:6-12months expenses

   One shall be prepared for any eventuality by putting away 6-12months expenses in bank account or openended mutual funds.

 7)Will: One shall ready with it

   Lack of a will could cause confusion for one’s

  Family.One shall be smart by drawing up a will.

Financial News for the day- 01/07/2014

The S&P BSE Sensex gained 13.5% in the quarter ended june-14 to register its highest rise in ninteen quarters.The quarter saw the formation of the new government which enticed heavy FII buying.

 Foreign Institutional investors were net buyers of Rs 36005 Crores as market were in a bullish mode & are now striving for a new information regarding policy announcements for it to scale new heights.

Financial News for the day- 26/06/2014

The Govt announces extension of lower excise duty for another 6 months till 31-12-2014.This is sentimentally positive as prices of products will remain lower by 4-6% & may help in boosting the demand for the auto sector especially in cars & commercial vehicles

RBI's Current efficient Governor & Present Pro-Growth leader Modi. A perfect combination to kill interest rates

Hailed as a troubleshooting "James Bond" of central bankers amid India's currency crisis last year, Raghuram Rajan was given a licence to kill inflation with higher interest rates and drive a programme of monetary policy reforms.

Now, the governor of the Reserve Bank of India (RBI) may need all the suave charm of the fictional British spy to sell that same hard-nosed agenda to a powerful new prime minister who is determined to revive economic growth and create jobs.

Rajan, who calls high inflation a "dangerous disease", won plaudits after he took office in September for arresting a rupee freefall and helping restore investor confidence that had all but evaporated under a lame-duck government led by the Congress party.

This month's decisive election win by the pro-growth Bharatiya Janata Party (BJP) shifts the power dynamics. Now, investors and voters are looking to Prime Minister Narendra Modi to stir India's economy from its prolonged torpor, putting Rajan and Modi on a collision course if inflation stays high.

In his first months on the job, Rajan overcame push-back from within the central bank as well as the finance ministry to shift the benchmark inflation measure from wholesale to consumer prices. The consumer price index (CPI) is the global standard, but in India the higher level of CPI meant Rajan was likely to keep rates tighter for longer.

High interest rates make credit more expensive and create a difficult environment to re-ignite growth.

But if, as many expect under Modi, the investment climate improves and government expenses are managed better, Rajan might get some relief on the inflation front. Investors expect Modi to bring down inflation by cutting subsidies, improving food distribution and promoting investment in infrastructure.

"The Modi-Rajan equation reminds us of that between Volcker and Reagan, where it was a combination of the central banker's inflation-fighting cred and the latter's charismatic image," said Philippe Jauer, chief investment officer at fund manager Amundi Singapore. Paul Volcker was head of the U.S. Federal Reserve when Ronald Reagan was president in the 1980s.

For now, the RBI is expected to leave interest rates on hold at its policy review on Tuesday, but investors will be scouring Rajan's accompanying statement for clues to whether the new government's strong electoral mandate has changed his rate outlook.

Investors expect the next policy move will be a rate cut, but perhaps not before early next year.

TIES AT THE TOP

A professor at the University of Chicago and former chief economist at the International Monetary Fund, Rajan was brought back to India in 2012 to be chief adviser to then-finance minister P. Chidambaram of the Congress party, which meant the two already had a working relationship when Rajan took over at the RBI.

After stunning the markets with a series of bold measures on his first day, he was dubbed variously by the Indian media as "The Guv" and "a rock star banker".

The "Name's Rajan, game's Bond," the Economic Times daily gushed on its front page, with a photo-edited picture of Rajan in an action pose and brandishing James Bond's trademark Beretta pistol, albeit one made of rupee notes.

Rajan, 51, has proven to be a pragmatic - if not swashbuckling - operator at the RBI, pushing to streamline a staid institution, deepen markets, and reform policymaking to control the country's grinding inflation.

Rajan and the new finance minister, Arun Jaitley, 62, a prominent corporate lawyer, held a meeting in New Delhi on Tuesday, but have not previously worked together.

Jaitley is not seen to be as hawkish as Rajan on inflation - a dynamic that is typical between central bankers and governments around the world and often leads to tension.

One senior finance ministry official who worked with Rajan and was part of the team that made a presentation this week to Jaitley said Rajan's initiative to set an inflation target based on CPI could create conflict if, as many expect, CPI rises in coming months.

"Rajan is ... making things difficult for the government by publicly speaking about RBI's stance on the CPI inflation. He would not find it easy to backtrack even if he wants to adjust with the new government," the official said.

The shift would give the central bank a clear price-stability mandate and make fighting inflation its chief objective. Previously, the RBI was charged with promoting growth and financial stability as well as controlling inflation.

FAR FROM DONE

Getting the new government's support for inflation targeting is far from a done deal. Rajan has done what he can to set an informal target by establishing a "glide path" to get CPI inflation down to an annual 6 percent by January 2016 and 4 percent, plus or minus 2 percentage points, a year later.

CPI inflation was at 8.59 percent in April year-on-year after running near or above 10 percent for almost two years through the end of 2013.

"Inflation targeting will require trying to convince the government, and I think it won't necessarily be a bed of roses. But I think it is a right step," said Rajeev Malik, senior economist at CLSA in Singapore.

Inflation targeting and setting up a monetary policy committee - as Rajan proposes - both require legislative changes. Agreeing on the make-up of a committee, including whether the government would appoint members and who they might be, could prove contentious.

Rajan recently softened his tone, noting that inflation targets are for the medium term and are flexible, and that the proposal does not aim to turn the RBI into "inflation nutters".

However, he was uncharacteristically blunt on the subject of RBI independence in other recent remarks.

"I am happy to talk to the government, I am happy to listen to the government, but ultimately the interest rate that is set is set by me," he said at an event in St. Gallen, Switzerland.

"The government can fire me, but the government does not set monetary policy."

On Friday, Rajan struck a measured tone during remarks in Tokyo, which sent Indian bond yields to a four-month low.

"The government and the central bank have both stressed the need to emphasise the need to bring down inflation, while respecting the fact that growth is very weak. You need to ensure through a variety of means we sustain the growth process," he said.

Source:

https://in.finance.yahoo.com/news/rbis-007-rajan-faces-pro-030000361.html

Revenue land purchase- One should take care before purchasing

Lot of people are  interested in investing in a revenue site. It seems to be a lucrative investment, but highly risky, if you invest in one without verifying the documents correctly, you might be landing yourself in a big mess. There is a downside to it and people who want to buy a site in a private layout need to be aware of what they are getting into before investing all their hard earned money into it.

Private layout, Revenue site and a Gramthana site

When a layout does not have its proper approvals under the relevant laws it is an unapproved layout. Sometimes the land may be converted from agricultural to non-agricultural purpose, but the approval of the planning authority may not be there, that is to say that it is an unapproved layout without a sanctioned plan for residential purposes. It is necessary that the layout plan is sanctioned by the appropriate planning authority such as the BDA or the BMRDA. Certain legal requirements under the Land Revenue Act, Land Reforms Act, The Town and Country Planning Act, BDA Act etc., need to be fulfilled for the layout to be an approved one. 

No layout can be formed on land for which notifications are issued for acquisition by the government agencies or if it is grant land belonging to the SC and ST community. Thus, a revenue site is a site that is formed on a land that has not been authorised or converted for residential purpose by the State government. 

A Gramthana site is a site within the village limits that is earmarked for residential purpose. Kanishmari numbers denote these sites. Here even though the site is located in the green belt area it does not require conversion. But it is very rare that genuine Gramthana sites are available today, most of it is carved out on the basis of fabricated documents.

Procedure to form a private layout.

1) According to the Town Planning rules, any person who wants to carve a residential layout in an agricultural piece of land has to approach the DC for the purpose of conversion of the agricultural land from agricultural to non-agricultural/residential purpose. 

2) The DC then verifies if the said land comes under the residential zone as per the Comprehensive development plan (CDP) issued by the State Town Planning authorities. 

3) On collecting the requisite fees, the DC then will issue the conversion order for using the land for residential purpose. 

4) The land owner/developer then has to approach the planning authority with the layout plan drawn by a registered engineer or architect, as per the bye-laws of the planning authority (BDA or the BMRDA, as the case may be).

5) The planning authority concerned will approve the layout and will release a list of site numbers, which can be marketed before completion of developmental works. On satisfactory completion of all development works such as laying roads, providing water, electricity and sewage connections etc., the planning authority will release the remaining sites for sale.

Problems or risks in buying a revenue site in private layouts.

1) Today, the developers are developing layouts without land conversion and without getting layout plans approved by BDA/BMRDA. Many a times it is seen that without even being empowered, such layouts have been approved by Village Panchayaths/CMCs, with layout plans, thereby permitting narrow roads and no other basic amenities being provided.

2) There are many layouts formed with fabricated conversion orders.

3) The layouts have been sold on paper even in ‘green belt' areas (area reserved for no development), land reserved for commercial/industrial purpose, land on tank bunds (which actually are owned by the government) and even the land notified for acquisition by government agencies. 

4) The purchase of such a site will not confer a good title on its owner. A village panchayat secretary, president or administrator,  is neither empowered to sanction a layout plan nor a building plan. No building can be constructed on agricultural land without obtaining the conversion order, layout plan and building sanction plan. 

5)You will also be liable to pay various statutory fees and levies which have not been paid by the developer. Unauthorised layouts are often without basic amenities and do not conform to Town planning requirements. They may lack proper roads and open spaces which should be about 50% of the total area, as stipulated by the law. These layouts will prove to be inconvenient in the long run and have little resale value.

6) If you buy a site in an unapproved layout you could face problems with regard to Khatha transfers, plan sanction etc., The construction carried out by you can also be demolished and no action can be taken against the planning authority in such a case.

Note:

Residential layouts can be formed only in lands converted for residential purpose. Such land should be in the residential zone as per the zonal regulations. It should be approved by the concerned authorities. A sanctioned plan will have a seal, date of sanction and signature of the authority granting the sanction, together with a certificate issued to that effect by the authority which approved the plan.

If you are planning to buy a site in and around Bangalore, select a layout which is either approved by BDA or BMRDA and select the site with a particular number approved for sale, as mentioned in the letter issued by BDA/BMRDA. Collect the copies of all the property documents and various approvals obtained by the developer and engage an advocate to verify the title to the property.

Authorities that approve layouts.

1) The Bangalore Development Authority (BDA) is the sole planning authority for approving layouts under its jurisdiction consisting of areas falling under erstwhile BMP (Bangalore Mahanagara Palike), seven CMCs (City Municipal Councils), one TMC (Town Municipal Council) and specified villages surrounded by CMCs. 

2) BMRDA (Bangalore Metropolitan Region Development Authority) has the authority to approve layouts outside the BDA areas and the jurisdiction extends up to 50 km (approximately) from Vidhana Soudha, as per the BMRDA Act, 1991, that is to say Bangalore Urban and Rural Districts and Malur Taluk of Kolar District excluding the areas covered by BDA, BIAAPA and other LPA's.

3) The Bangalore International Airport Area Planning Authority (BIAAPA) - for its local planning area which includes the area of the airport and its environs. 

4) The Ramanagaram - Channapatna Urban Development Authority (RCUDA) - for Ramanagaram - Channapatna local planning area.

5) Nelamangala Local Planning Authority - For Nelamangala Town & its environs.

6) Magadi Local Planning Authority - For Magadi Town & its environs.

7) Kanakapura Local Planning Authority - LPA of Kanakapura.

8) Anekal Local Planning Authority - LPA of Anekal. 

9) Bangalore Mysore Infrastructure Corridor Area Planning Authority(BMICAPA).

Documents to be verified before buying a revenue site.

A. Conversion order from DC.

B. Receipt for paid conversion amount.

C. RTC for 30 years.

D. Documents of ownership.

E. MR extract.

F. Akarbhandh/ Tippani/ Pod extract/ Survey sketch.

G. Tax paid receipt.

H. Boundary map.

I. Village map.

J. Nil tenancy certificate.

K. Approved layout plan.

L. Khatha certificate issued by relevant authority.

M. Encumbrance certificate in Form 15 and 16 for 42 years.

N. Zonal regulation map.

O. Power of attorney (if any).

P. No acquisition proceeding evidence.

As a precaution it is better to give a public notice about the purchase in the newspaper.