QROPS Bahamas. Pension Tax Relief for British Expats in the Bahamas
British expats living in the Bahamas or wanting to retire in the Bahamas can now transfer their pension into a QROPS Bahamas to maximize pension tax relief. British expats living in Nassau, the Bahamas can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like Gibraltar and will no longer have to pay UK taxes on their pension as long as they stay offshore.
Bahamians who have worked in the UK or a British company can also move their pension to a QROPS to avoid 55% tax upon death and UK income taxes of up to 45%.
QROPS Bahamas. What are the Benefits of a QROPS for a British Expat in the Bahmas
QROPS Bahamas Pension Transfer for British expats. What are the benefits?
• Avoid UK income tax
• Avoid UK dividends tax
• Avoid UK capital gains tax
• Avoid UK inheritance tax
• Have the ability to make higher returns with freedom of investment
• Choice of currency. You can transfer your pension to a QROPS Bahamas in USD rather than GBP.
• Protection: if anything happens to you, your nearest and dearest gets the entire pension pot
• Security: Secure pension in sound jurisdictions such as Gibraltar which has strong financial regulations and pension protection systems in place.
What is QROPS Bahamas?
A Qualifying Recognized Overseas Pension Scheme (QROPS Bahamas) allows your UK pension to be transferred offshore to reduce your tax burden. Effectively, you will no longer pay UK tax on your pension whilst you are offshore and after 10 years of living offshore, the reporting requirements to HMRC cease.
Why retire in the Bahamas as a British expat?
It is estimated that there are about 4,500 Britons in the Bahamas. The Bahamas, officially the Commonwealth of The Bahamas, is a nation consisting of 29 islands, 661 cays, and 2,387 islets (rocks). It is located in the Atlantic Ocean north of Cuba and Hispaniola (Dominican Republic and Haiti), northwest of the Turks and Caicos Islands, and southeast of the United States (nearest to the state of Florida). Its total land area is 5,382 square miles, with an estimated population of 330,000. Its capital is Nassau. Geographically, The Bahamas lie in the same island chain as Cuba, Hispaniola and the Turks and Caicos Islands; the designation of Bahamas refers normally to the Commonwealth and not the geographic chain.
The Bahamas became a Crown Colony in 1718 when the British clamped down on piracy. Following the American War of Independence, thousands of pro-British loyalists and enslaved Africans moved to The Bahamas and set up a plantation economy. The slave trade was abolished in the British Empire in 1807 and many Africans liberated from slave ships by the Royal Navy were settled in The Bahamas during the 19th century. Slavery itself was abolished in 1834 and the descendants of enslaved and liberated Africans form the bulk of The Bahamas’s population today.
By the terms of GDP per capita, the Bahamas is the third richest country in the Americas (following the United States and Canada), the richest one that lies south of the Mexico – US border, as well as the richest one in the world whose population is predominantly of African origin.
If you are living in Bahamas at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS to avoid further UK taxes at a later date. In fact, HMRC change their rules every year, but if you move in the same tax year, so far you have been locked in to those rules even if there are future changes.
What is the economy like in the Bahamas?
The Bahamian economy is driven by tourism and financial services. Tourism and tourism-related construction and manufacturing provide an estimated 60% of the gross domestic product (GDP). Tourism directly and indirectly employs about half the Bahamian work force. Around 5m tourists visited in 2010. Financial services constitute the second-most important sector of the Bahamian economy, accounting for up to 15% of GDP, due to the country’s status as a tax haven and offshore banking center. Agriculture and fisheries together account for about 2% of GDP. The Bahamas exports lobster and some fish but does not raise these items commercially. There is no large-scale agriculture, and most agricultural products are consumed domestically.
A major contribution to the recent growth in the overall Bahamian economy is Kerzner International’s Atlantis Resort and Casino, which took over the former Paradise Island Resort and has provided a much needed boost to the economy. In addition, the opening of Breezes Super Club and Sandals Resort also aided this turnaround.
The Bahamian Government maintains the value of the Bahamian dollar on a par with the U.S. dollar. This makes it perfect for a QROSP Bahamas pension transfer as you can hold your pension in USD rather than GBP and thus limit currecny fluctuations in the future.
QROPS Bahamas. What Tax to I Pay on My QROPS?
Residents in the Bahamas do not pay income taxes. Although there are other taxes. If you live in the Bahamas, you can find out about their taxes from the Ministry of Finance in the Bahamas.
Do I need to move my pension to Bahamas?
No. Your pension can be transferred to Gibraltar where it will be out of the UK tax system. You don’t have to transfer your pension to the country you retire to. This is a misconception. You can hold your pension in USD in Gibraltar where it will grow tax-free and then you can simply have your pension paid to your account in the Bahamas or an offshore account. The only tax you will pay is a flat rate 2.5% tax upon your pension.
Do I need to live and retire in Bahamas?
No, as long as you live outside the UK, you will receive the benefits of the QROPS transfer. If you return to the UK, your pension will revert to UK SIPP rules.
Income Tax Bahamas. What is the Tax on My QROPS in Bahamas?
There is no personal income tax in the Bahamas (2013). You would only pay the flat rate income tax of 2.5% income tax at source in Gibraltar.
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Pension tax relief for British expats, QROPS Bahamas article written by QROPS Specialists.