QROPS: Made simple!
I am looking to cut through a variety of technical terms that some people will have heard of, some people with know about and others who have absolutely no idea what I am talking about. These guides are here to help, and educate, but should you need any professional advice please get in contact.
QROPS is a term that many UK Expats who live abroad may have heard of, either having been approached by an endless stream of Financial Advisers through various means, or by investigation into their pension options. Unfortunately many, but not all, of the Financial Advisers that approach you may have no relevant qualifications, nor any real understanding of the products that they are offering! Scary really!
So what is a QROPS?
QROPS stands for Qualifying Recognised Overseas Pension Scheme. It is a mechanism of transferring you UK pension benefits to a pension scheme held overseas, most importantly without incurring a tax liability. The scheme that you transfer into has to be recognised by HMRC, as well as having to qualify with them.
Before QROPS were introduced, pension schemes had to be transferred to the pension scheme member’s country of residence. But with the introduction of QROPS new avenues were opened with professional QROPS providers, as well as jurisdictions in new countries.
When HMRC approved QROPS in 2006, it also introduced a list of the schemes that were recognised as qualifying. This means that any scheme which is not included on that list could not be transferred.
The benefits of a QROPS
There are many benefits to take advantage of when it comes to QROPS, both as part of an effective tax planning strategy, and has investment advantages. Some of the benefits to consider:
No UK tax on pension income
Investment Freedom
100% access at 55 years old
No Inheritance Tax
These are what make QROPS such a popular option for UK expatriates, but they are not always the best option for everyone. Changes to the UK pension legislation have reduced some of the benefits traditionally highlighted for QROPS.
It is important to consider the whole financial situation, and all of our expert advisers are qualified to advise both in the UK, and overseas. This will give you the peace of mind you need.
So if you need any help then please get in contact via our form.at the top of the page.
