QROPS Pension Service
If you have a UK private or company pension and you currently live abroad or are thinking of moving abroad, we can help you get more out of your pension with a QROPS.
A Qualifying Recognised Overseas Pension Scheme, or QROPS, is an overseas pension scheme that meets certain requirements set by HM Revenue and Customs (HMRC).
A QROPS can receive the transfer of UK Pension Benefits from most private and company pension schemes, without incurring an unauthorised payment and scheme sanction charge.
Benefits of a QROPS
For those considering using a QROPS to unlock a pension scheme, you can look forward to enjoying a number of benefits.
Tax benefits of a QROPS
Income from UK pension arrangements is subject to income tax. It is collected as a withholding tax and this tax is applied to everyone in receipt of UK pension income whether or not they live in the UK and with no exemption for foreign nationals. QROPS pension income is paid out without withholding tax.
No maximum Lifetime Allowance
Any growth in value of the QROPS above the value of the UK Lifetime Allowance (£1m 2016/2017) paid as a pension, will escape the 25% Lifetime Allowance excess tax charge. This charge would otherwise apply to any pension paid from a UK registered pension scheme to persons who are UK resident or non-resident for less than five years where the value of the pension exceeds the Lifetime Allowance.
Inheritance and estate planning
As a QROPS is not under UK jurisdiction or tax laws, transferring your funds to a QROPS provides you with protection from UK inheritance tax.
Overseas pension schemes will usually ensure that residual pension funds pass to the intended beneficiaries much easier and quicker than would be the case in the UK.
Dealing with the question of what happens on death for expats with a QROPS is more straightforward.
The nature of the scheme means that the pension fund is outside of the pension holder’s estate for the purposes of UK inheritance tax (IHT), so providing the beneficiaries receiving any unused funds are not tax resident in Britain, they get to keep the money. IHT rules may apply in the country where they are tax resident of course.
QROPS and other overseas pension schemes allow for the payment of pensions in currencies other than Sterling, providing a valuable safeguard for expats.
Freedom of choice with a QROPS
As an expat you can move your pension funds into a QROPS ‘in specie’, which means you can use the same funds, but under the QROPS umbrella for tax shelter. Alternatively, you could invest in almost whatever: mutual funds, shares, ETFs, gold funds, silver funds or bond funds that you choose.
Protect your investments
Depending on the jurisdiction chosen for the Overseas Pension Scheme, there is the potential for greater protection against creditors and other claimants than is typically available with UK pensions.
Accessing your funds
With a QROPS you will be able to access to your pension at 55 and also be able to receive an increased tax free lump sum of 30% rather than the 25% if you have been offshore for 5 years.
QROPS also allows you to draw a higher pension income than in the UK.
A QROPS also enables you to get all your pensions transferred to the same place, where you can access them online whenever you want, giving you greater visibility.
With a QROPS there is no need to buy an annuity at any time.
With a QROPS you can avoid future changes to UK tax and pension legislation.
Why Choose us?
Do you have any questions about your UK pension or would you like to know more about to out how you could benefit? Simply complete the contact form below and you will receive honest, regulated and independent advice so you can make an informed decision.
If you have any UK private or occupational pensions, your first port of call should be to seek the advice from a qualified and regulated financial advisor. Your advisor should, of course, be completely up to date with UK pension legislation but also know all the ins and outs of local tax laws, both in the country where you currently reside as well as the local tax laws of the jurisdiction where the overseas pension scheme is based. Failing to do this could result in having to pay tax, either in your country of residence or the country where the pension scheme is based. Careful planning and execution could, in most cases, result in little or no tax payable, which would ultimately mean more money for you during retirement.
Another crucial matter is the choice of investments in which your pension fund is invested. A one percent increase in annual return on these investments could nearly double your fund over time. Again, a qualified financial advisor will be able to advise you on this, taking into account your appetite for risk and how long time you have left before you are due to retire.
We are pleased to announce that we are able to assist you in transferring to a recognised overseas pension scheme in Pound Sterling, which can be converted in to any currency you like, when it suits you. This could help to mitigate the recent fall in GBP.
For more information, please complete the contact form on this page and a qualified and regulated advisor will contact you to discuss your options.