Qualifying Recognised Overseas Pension Schemes (QROPS)
Main Features and Benefits
•Her Majesty's Revenue and Customs (HMRC) permit UK pension funds to be transferred to a QROPS.
• QROPS must operate on the same basis as UK schemes for those members who were resident in the UK at any time during the previous five complete UK tax years.
• For anyone currently in the position of having been non-UK resident for at least five compete tax years (or when they satisfy that condition) reporting requirements in respect of member payment charges fall away and payments become non-reportable to HMRC.
• The main attraction of transferring UK pension funds to a QROPS is that the pension fund can become subject to the laws of the relevant overseas jurisdiction. This means that none of the UK requirements apply and you do not have to purchase an annuity. There is complete control over your fund, income flexibility and 100% of the fund can be passed on to your family or other nominated beneficiaries on death. You can also have your pension denominated in Euro's in order to avoid any fluctuations in exchange rates which may reduce the spending power of your pension.
Transferring UK pension funds to a QROPS
• A QROPS can receive transfer values from any UK registered pension scheme.
including protected rights funds, even where benefits have already been taken, but not including annuities.
• If you have a UK self-invested personal pension scheme in ‘drawdown’ where unsecured income is being paid, it may be beneficial to transfer to a QROPS if you are non-UK resident, about to become non-UK resident, and intend to remains so in the forseeable future.
Investment funds available within a QROPS
• Transfers from UK pension schemes will be paid to the QROPS in cash, which can be placed on deposit by the trustees with a branch of a UK bank. Investments are then made from this account. In some cases investments can be transferred 'in-specie'.
• Investments can be made in a very wide range of investment vehicles, including life assurance company funds, unit trusts, shares, property and cash.
• There is no maximum limit to the amount that may be accumulated within a QROPS
Retirement options and benefits
• Benefits can be taken at any time after the age of 55,
(age 50 in some jurisdictions subject to certain criteria) .
• There is no obligation to buy an annuity.
• Benefits may be taken as income from the fund without any maximum limits.
• Part of the fund may be taken as a cash lump sum.
• There is no deduction of taxation at source. Please note that taxation may apply in your country of residence.
• Your funds can be denominated in Sterling, Euro or US Dollars, eliminating exchange rate risk for many clients.
Death benefits
• On premature death 100% of the funds may be distributed to the nominated beneficiaries by the scheme trustees in accordance with the scheme rules.
Risks
The value of investments may fall as well as rise and there is no guarantee that final benefits will be the same as projected amounts shown in any illustrations.
If taking higher levels of income than recommended by the Governments Actuaries Department your pension will be reduced over the longer term and may be insufficient for your long term pension needs in retirement.
If you return to the UK as a UK tax resident at any time in the future then your QROPS arrangement will immediately become subject to UK pension rules.