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QROPS is a "Qualifying Recognised Overseas Pension Scheme" that has met the criteria laid down by HMRC and is recognised and listed as such. In 2006 ("A" Day) the UK Government dramatically altered UK pension rules to enable you to transfer your UK Pension to an overseas plan without tax deduction and with no future tax liability (subject to 10 years of non-UK residency.)

How to plan a peaceful stress-free retirement abroad?

The QROPS landscape has evolved dramatically since "A" Day but pension legislation remains complicated and subject to change. New rule changes introduced in the UK Spring Budget of 2017 means that UK pension transfers are subject to a transfer tax of 25% unless the member is resident in the EEA or is resident in the same jurisdiction as the QROPS provider. At the moment EEA rules prevent HMRC from taxing movement of capital away from the UK but post Brexit there may be similar issues for EU residents. This means that if you are resident in the EEA it will pay to act swiftly to make sure that all options remain open to you.

“We have never underestimated the importance of managing your pension pot to help you achieve the retirement lifestyle of your choice.”

How Does UK Pensions Freedom Affect QROPS?

UK pension rules changed dramatically from April 6th 2015. If you are aged 55 or over and have a Money Purchase Pension Scheme (Defined Contribution) you will be able to access all or as much of your pension fund as you require at anytime. Flexibility usually comes at a price and any benefits that you access in the UK over and above a 25% tax free lump sum will be taxed at your highest marginal rate.

The tax you pay when you move your pension to QROPS will depend on where you pay your taxes. Our retirement planning specialists will be able to guide you in respect of the tax due on your QROPS Pension income when they know where you are going to be resident.

In our experience we know that you will have accumulated your pension fund in order that it will provide for your income needs in later life. Careful planning is needed to ensure that your fund will survive as long as you do and hopefully there might be something left over for your dependents.

Can I Move a Final Salary Scheme Into a QROPS?

Yes, you can although whether that will be the best advice for you will depend on many factors. Of course, pensions freedom, mentioned earlier, will provide a lot more flexibility than a final salary pension scheme ever can but whereas a final salary scheme will provide guaranteed benefits the return from all other pensions depend on the performance of the underlying investments. In many cases, but not all, the guarantees offered may well outweigh flexibility. As part of the expert pension review process we offer, one of our expat pensions specialists will thoroughly investigate the benefits offered by your final salary arrangement and compare these with an appropriate QROPS option to make sure that the right decision is made for you.

Can I Consolidate a Number of UK Pensions?

Yes, it is possible to bring together all of your existing pension arrangements (except for state benefits) and hold them together in one QROPS. This will simplify your pension arrangements and allow you to draw retirement income from just one source.

Can I Consolidate UK Pensions Without The Need For QROPS?

Yes, if we agree that QROPS is not the most suitable vehicle for your pension funds then we can put all of your existing UK pension funds into one scheme within the UK.

Can I Avoid The New Death Tax Charge by Switching to QROPS?

New rules mean that if you die after the age of 75 your beneficiaries could pay tax of up to 45% before receiving the remainder of your fund. If you move your pension fund to a QROPS then after ten complete tax years outside of the UK this rule will no longer apply and your chosen beneficiaries can receive all of your remaining fund without suffering this UK tax liability.

Will The New Lifetime Allowance Apply if I Move to QROPS?

Successive UK governments have reduced the lifetime allowance which now stands at £1.03M (any fund amount over this figure is subject to a penalty tax). If you move your fund to a QROPS this penalty charge will no longer apply. This could be of major benefit to anyone whose fund is close to the £1.03M threshold.

The key benefits of establishing a QROPS as a UK Pension for you can be summarised as follows:

  • Your pension assets would grow within a tax-free environment.
  • Your heirs would avoid UK Inheritance after 10 complete and consecutive tax years of non-UK residency.
  • No lifetime allowance cap on the amount of pension you can accrue.
  • Removal from any adverse future UK pension legislation.
  • Depending on your country of residence the opportunity to pay considerably less tax on your pension income.
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Talk to Us

Speak to a UK pension transfer specialist about QROPS. If you require expatriate pension transfers or QROPS advice give us a call.

For further information please contact us on Tel: +44 207 998 0570 or email enquiries@fiduciarywealth.eu