QROP. Best QROP Schemes
What is a QROP? QROPS stands for Qualifying Recognized Overseas Pension Schemes. These are vehicles used by UK expats living abroad in order to avoid paying any more UK taxes on your pension. Normally, you need to have lived or retired abroad for at least 5 years in order to take advantage of a QROP scheme. According to BBC Brits Abroad project, more than one in every ten Brits has gone to live abroad at some point in their lives. As you no longer live in the UK, you shouldn’t need to pay taxes for all the services that you won’t use. A QROP scheme will enable you to get the best pension tax relief possible whilst you live offshore.
QROP Providers. How to choose the best QROP Providers
There are hundreds of QROP providers available on the market and there are many factors which will influence which QROP jurisdiction will suit you best. In order to get the maximum pension tax relief from your pension scheme, you need to consult QROP Specialists.
- As long as you haven’t purchased an annuity, most pension schemes can be transferred into a QROP scheme. The state pension scheme cannot be transferred into a QROP scheme, but any transferred out protected rights such as SERPS and S2P can be transferred into the scheme.
- You can transfer multiple pensions into the scheme which mean that you could save money on administration costs and manage all your pensions in one place; easily manageable online.
- The tax advantages are considerable and can help you to avoid paying both income tax and inheritance tax.
- Unlike a UK pension scheme, upon death the entire value of the pension gets passed on to your spouse and when she passes away, the full pension is passed on tax free to the kids. Under UK pension regulations there is a 55% death tax charge.
- You can choose the funds you want in your pension. You are not restricted to UK pension choices. This means you have a much widerrange of funds to choose from including 100% capital protection products, bank deposits, mutual funds, commodity funds, precious metal (gold & silver) funds, ETF’s and shares on most major stock exchanges.
- You can hold your QROP scheme in many currencies. So, if you are living in Spain, you can hold your entire pension in Euros, so that you don’t have to worry about currency fluctuations eating into your pension. You can hold in USD, GBP, EU, CHF (Swiss Francs), SEK (Swedish Krona), ZAR (South African Rand), amongst others.
- Beware of QROP schemes which allow full encashment. HMRC are clamping down on these schemes and they have a task force looking out for such transfers. QROP schemes are meant to provide a pension for expats living abroad. They are not meant as a way to get round Inland Revenue laws so you can cash in your pension
- QROP schemes are efficient vehicles for UK expats who intend to retire abroad, but these are technical products and a QROP specialist must be sought to get proper advice as well as the lowest fee structure.
QROP Schemes. Best QROP Advice
QROP schemes can be very beneficial, especially for those expats who have a large pension pot and live abroad. They are not the suitable scheme for every expat though and proper advice must be sought out from QROP specialists. For large pension pots and how to get the best pension tax relief, click on QROP
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QROP article written by QROPS Specialists.QROP by Richard Malpass