How do QROPS work?

Her Majesty's Revenue & Customs (HMRC) permit UK pension rights to be transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS). The QROPS must be in effect as if it were a UK scheme for those members who have been resident in the UK at any time in the previous ten tax years. The QROPS is structured very much like a UK pension; i.e. an investment vehicle which is owned on your behalf by a pension provider/administrator (the trustees). The trustees must be based outside the UK and approved by HMRC as a QROPS administrator.

Full information on the QROPS scheme and more importantly the most suited jurisdiction for the QROPS to be held will be provided to you when you speak to one of our QROPS advisers, without cost or obligation

QROPS KEY BENEFITS

The key benefits of QROPS are:

• Remove death duty - leave all unused pension funds to your beneficiaries free of UK taxes.
• There is NO requirement to purchase an insurance annuity.
• There are no limits on contributions to the fund, nor fund size.
• Flexibility as to when benefits can be taken from the pension (personal tax status allowing).
• Take income and benefits in currency of your choice.
• Greater tax efficiency on drawdown.
• Tax advantages and savings.
• The ability to take in transfers from UK approved pension schemes.
• Open to all nationalities.
• Investment flexibility, with investments in stocks, bonds, alternative investments, deposits, real estate, private equity, options and life policies.
• Transparent fee structure with no hidden penalties or exit fees.
• Avoid or diminish exchange rate risks

The key benefits of SIPPS are:

• Flexibilty – if you are living abroad but are undecided about where you want to retire to
• Wide choice of  investments
• Avoid or diminish exchange rate risks
• You can manage your own investments
• The set-up costs are low and fee structure transparent.
• No capital gains tax or further income tax
• No inheritance tax if you die before retiring
• A SIPP can be transferred to a QROPS

Is it right for me to transfer my pension?

Everyone’s circumstances are different. The factors which will determine whether it is advisable to transfer your pension include:

• Your pension type:  Most UK pensions can be transferred to a QROPS but not final salary or defined benefit schemes already in drawdown
• Your residency status: Whether you plan to retire overseas; return to the UK; or are undecided
• Your pension value: We only advise transferring a pension where the transfer will generate sufficient tax savings to justify the set-up costs – the value varies according to a person’s circumstances
• How near you are to retirement

PensionsPlus will make sure your pension is protected and will design a flexible plan for your retirement suited to your individual circumstances. That could mean transferring your pension directly into a QROPS or transferring into a low-cost SIPP with no exit charges initially meaning your pension is portable and easily transferred into a QROPS when circumstances allow.

Why should I be interested? 

• Tax efficiency: It is possible to receive income from your pension fund either tax free or at lower rates of tax subject to the laws in your country of residence. 
• Investment choice: There is no need to purchase an annuity. The fund can be placed in a much wider range of investments of the pension-holder’s choice.
• No inheritance tax: The pension fund is paid directly to the heirs of the pension-holder.
• Avoid or diminish exchange rate risks: The income from your pension can be taken in the currency of your choice.

Under UK legislation effective from April 2006, expatriates or UK residents who have either moved, or will move overseas for a minimum of five years, can transfer their existing UK pension offshore to an approved scheme. By doing this, it is possible to avoid many restrictions that would typically be imposed on their pension fund if it remained in the UK, and simultaneously achieve considerable tax savings when the pension is drawn down.

PensionsPlus provides specialist financial advice and can answer questions specific to your individual needs. We advise on a choice of HM Customs and Revenue Approved QROPS and SIPPS that best suit your personal financial requirements. These plans offer UK persons living abroad the opportunity to unlock the true potential of their pension.
Making the right choice of QROPS is vitally important. PensionsPlus advisers will help you look at how the benefits are paid from the scheme, the country or territory's tax position and the investment choices the scheme has to offer.
Contact us for a free, no obligation comprehensive pension review.

PENSION TRANSFERS INTRODUCTION

Offshore Pensions - Moving or Living Abroad
The UK government still gets its pound of flesh, as it taxes your pension when you withdraw it, even if you no longer live in the UK. That may seem inequitable for those expats living abroad in a low or no- tax country. But there is another way. A QROPS (Qualifying Recognised Overseas Pension Schemes) - or the use of a SIPP (Self Invested Pension Plan) as an interim solution - are alternatives.
Every UK expatriate should seek advice on transferring their UK pension, as to do nothing could prove very expensive.