QROPS Pension Transfers Explained

If you’ve never heard of the acronym QROPS before, it stands for Qualifying Recognised Overseas Pensions Scheme, and this is a specific type of pension available and potentially highly beneficial to expatriates and anyone contemplating living or retiring abroad.  If that sounds like you or someone you know, read on and the QROPS pension release scheme will be explained.

Main benefits include:

  • Never purchase a UK annuity.
  • Leave all unused pension to your beneficiaries
  • Much greater investment freedom offshore
  • Take income tax free or massively reduced rates of tax
  • We have been lead to believe that this massive opportunity may come to a close in the future
  • If you are an UK expat with a pension you want to release you need to act now, before it’s too late!
  • To Receive Your Free Pension Analysis & Guide To QROPS Simply Complete The Form On The Right

    QROPS are a relatively new invention as far as British expats are concerned.  It was only in April 2006 that it was announced that British expatriates could move their pension benefits to QROPS with the UK tax authorities’ approval; since then there has been a slow but steady take up as increasing numbers of people realise the massive and broad benefits available to them by using a Qualifying Recognised Overseas Pensions Scheme…

    First things first – let’s look at who can apply for a Qualifying Recognised Overseas Pensions Scheme and who can potentially benefit from such a scheme: –

    If you are a US citizen or a US resident, the majority of QROPS and related benefits are likely to be unavailable to you, but citizens of all other nations may apply.  If you are already an expatriate, you intend to move abroad shortly or you have plans to retire overseas, it may make significant financial sense for you to speak to a financial adviser about QROPS in relation to your personal situation.

    In terms of defining QROPS for British applicants, this is a pension scheme set up outside the UK that’s regulated as a pension scheme in the country in which it is established and which must be recognised for tax purposes in the country in which it is established.

    In terms of defining QROPS potential benefits for British applicants, the most significant benefits come in to play when the account holder has been non-resident in the UK for at least 5 years and has no intention of returning to Blighty for the foreseeable future.  This is because once your pension schemes have been transferred into QROPS and you have been non-resident for at least 5 years, then your QROPS provider is under no obligation to report any actions such as withdrawals or payments to the UK tax authorities.

    In addition to this, imagine if your QROPS provider is in a country where payments from such schemes are paid tax free – then pension related income can be enjoyed without the deduction of tax!  Although do bear in mind that your liability to pay tax may be dependent on your country of residence at the time of receipt of monies.

    Other benefits of these Qualifying Recognised Overseas Pensions Schemes for eligible British applicants include the fact that you are under no obligation to purchase an annuity by the age of 75 or be faced with a possible 82% tax charge if you do not!

    A significant proportion of a traditional British pension has to be taken in the form of an annuity.  This restricts investment freedom and it can restrict how you pass your wealth on to your loved ones when you die.  With QROPS however, you are under no obligation to use your pension to purchase an annuity.  Simply put, without the obligation to purchase an annuity you can invest your hard earned pension pot into potentially better returning assets and gain the very real advantage of passing remaining funds upon death to your beneficiaries instead of having your pension fund die with you.

    QROPS allow the investor significantly more freedom when it comes to how funds are invested and how income and gains are used.  For example, with a Qualifying Recognised Overseas Pensions Scheme you gain investment freedom, you can invest in onshore or offshore funds and access the highest fixed deposit rates available whilst achieving total investment diversification.  Depending on where you live, you may be able to enjoy your pension income in a highly tax efficient way.  You can leave unspent monies to your chosen beneficiaries upon death, take your income in the currency of your choice, protect your assets against possible future creditors potentially, and likely achieve greater confidentiality relating to all your investment activity.

    If you are an expatriate, you work abroad, you’re planning on moving overseas or you want to retire abroad, why not look into your eligibility for a Qualifying Recognised Overseas Pensions Scheme and, with the help of a financial adviser, determine whether you could benefit from QROPS.

    To Receive Your Free Pension Analysis & Guide To QROPS Simply Complete The Form On The Top Right