In April 2006 the UK government introduced far reaching changes to the pensions system in the UK. One of most revolutionary changes introduced was the HM Revenue and Customs’ backing and support of transfers of British pensions by expatriates to Qualifying Recognised Overseas Pension Schemes ('QROPS'). As a result, any expat, or intending expat, who has a UK pension plan, would be well advised to look into whether a QROP is a suitable option for thie circumstances.
In essence, a QROPs is any pension plan which is recognised as fulfilling certain criteria as laid down by the HMRC. Once a pension scheme meets those approved conditions, and has been recognised as a QROPS pension by the HMRC, it allows someone living outside of the UK to transfer their UK based pension assets into an offshore scheme.
Let us first take a quick look at the UK pension rules, and then we can see how the potential benefits of a QROPS pension are easily apparent. Once leaving the UK, an expat's UK pensions are frozen, and no contributions are allowed, but they will still attract hefty management charges. In addition, the investment strategy is in most cases a ‘one size fits all’ approach which cannot accommodate people with different risk profiles.
UK pension rules require all UK holders of pensions to buy an annuity, which is generally very poor value for money, and on top of that, they must pay tax on top of any annuity payments they receive. Inheritance rules are also much more inflexible - on death, a spouse can usually take up to half of the annuity, but it is not possible to transfer the pension to children or anyone else.
The creation of QROPs pension schemes under the 2006 legislation addresses these problems and creates new opportunities for British expats. This is achieved through establishing a QROPS plan, and transferring the pension assets overseas, into a tax neutral jursdiction.
QROPS Advisers are the renowned leaders in assisting expats on transferring UK pension assets into QROPs. It is essential to be clear that a QROPS transfer is not a suitable pension alternative for everyone. Seeking expert QROPS advice is imperative when considering whether such a scheme is right for you, and you can find a variety of resources at their website especially devoted to QROPS, at QROPS Adviser.net
In essence, a QROPs is any pension plan which is recognised as fulfilling certain criteria as laid down by the HMRC. Once a pension scheme meets those approved conditions, and has been recognised as a QROPS pension by the HMRC, it allows someone living outside of the UK to transfer their UK based pension assets into an offshore scheme.
Let us first take a quick look at the UK pension rules, and then we can see how the potential benefits of a QROPS pension are easily apparent. Once leaving the UK, an expat's UK pensions are frozen, and no contributions are allowed, but they will still attract hefty management charges. In addition, the investment strategy is in most cases a ‘one size fits all’ approach which cannot accommodate people with different risk profiles.
UK pension rules require all UK holders of pensions to buy an annuity, which is generally very poor value for money, and on top of that, they must pay tax on top of any annuity payments they receive. Inheritance rules are also much more inflexible - on death, a spouse can usually take up to half of the annuity, but it is not possible to transfer the pension to children or anyone else.
The creation of QROPs pension schemes under the 2006 legislation addresses these problems and creates new opportunities for British expats. This is achieved through establishing a QROPS plan, and transferring the pension assets overseas, into a tax neutral jursdiction.
QROPS Advisers are the renowned leaders in assisting expats on transferring UK pension assets into QROPs. It is essential to be clear that a QROPS transfer is not a suitable pension alternative for everyone. Seeking expert QROPS advice is imperative when considering whether such a scheme is right for you, and you can find a variety of resources at their website especially devoted to QROPS, at QROPS Adviser.net
