STM Group PLC Budget Changes (9313Y)
March 09 2017 - 2:00AM
UK Regulatory
TIDMSTM
RNS Number : 9313Y
STM Group PLC
09 March 2017
STM Group Plc
("STM", the "Company" or the "Group")
Budget Changes
Following today's UK Spring Budget, STM Group provides the
following update with respect to its understanding of the
announcement and the potential impact to the Group's business.
In his Spring Budget speech, the Chancellor indicated that there
will be significant charges and tax implications for some
individuals considering taking out a QROPS transfer from a UK
pension scheme. Whilst the detail of the proposed bill is yet to be
published, it would appear that those expatriate individuals living
outside the European Economic Area ("EEA") would incur a 25% exit
tax on their pension fund unless they are transferring to a QROPS
in the country they are resident in.
This change is likely to have an impact on STM's ability to grow
the number of QROPS policies it administers; however it is not
anticipated that this tax change will impact the Group's existing
QROPS business, which generated recurring revenue from annual
management charges of approximately GBP8.4 million in 2016.
Overall, the Group's pension business represented approximately 50%
of total revenue in 2016 (approximately GBP9 million) with annual
recurring revenues representing over 90% of this figure.
We currently anticipate that the proposed change in tax
legislation will not impact all of our new QROPS new business
generation. In particular, we believe that there should not be an
impact on new QROPS applications business from EEA countries, which
accounts for circa 20% of new QROPS business. The other 80% of new
QROPS business is generated from outside of the EEA and could
therefore be affected by this new charge.
Having spoken to intermediaries, they have advised that in
certain cases, and for certain countries, their clients may still
look to transfer their pension to a QROPS policy despite this
charge. Intermediaries will be carrying out extensive research over
the coming weeks to analyse the impact of the proposed new tax
charge further.
Furthermore, they have advised that whilst a QROPS might not be
such an attractive proposition for their clients, they would look
to promote a UK SIPP alternative. We therefore hope that an
increase in new applications for our UK SIPP business may mitigate
some of the impact of the new tax legislation on our ability to win
new QROPS policies.
Importantly we believe that our other revenue streams namely
from our life assurance businesses, as well as our Corporate and
trustee service provider business, will not be affected by the
proposed changes to QROPS tax legislation. These divisions
represent approximately 50% of STM's 2016 revenues.
The Group will provide further updates in due course once more
clarity in relation to the detail of the budget is announced.
For further information, please contact:
STM Group Plc
Alan Kentish, Chief Executive Tel: 00 350 200
Officer 42686
alan.kentish@stmgroupplc.com www.stmgroupplc.com
Therese Neish, Chief Financial Tel: 00 350 200
Officer 42686
therese.neish@stmgroupplc.com
finnCap www.finncap.com
Matt Goode / Emily Watts - Corporate Tel: +44 (0) 20
Finance 7220 0500
Mia Gardner - Corporate Broking
Walbrook www.walbrookpr.com
Tom Cooper / Paul Vann Tel: +44 (0) 20
7933 8780
Mob: +44 (0) 797
122 1972
tom.cooper@walbrookpr.com
Notes to editors:
STM is a multi jurisdictional financial services group which is
listed on the AIM Market of the London Stock Exchange. The Group
specialises in the delivery of a wide range of financial service
products to professional intermediaries and the administration of
assets for international clients in relation to retirement, estate
and succession planning and wealth structuring.
Today, STM has operations in Gibraltar, Malta, Jersey and Spain.
The Group is looking to expand through the development of
additional products and services that its ever more sophisticated
clients demand. STM has developed a specialist international
pensions division which specialises in Qualifying Recognised
Overseas Pension Schemes (QROPS), Qualifying Non UK Pension Schemes
(QNUPS). STM has a Gibraltar Life Insurance Company, STM Life plc,
which provides life insurance bonds - wrappers in which a variety
of investments, including investment funds, can be held.
Further information on STM Group can be found at
www.stmgroupplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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