QROPS Barbados. UK Pension Transfers for British Expats in Barbados
British expats in Barbados, moving to Barbados or wanting to retire in Barbados can now transfer their pension into a QROPS Barbados to maximize pension tax relief. British expats living in Barbados can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like
Why live or retire in Barbados?
It is estimated that there are about 34,000 Britons in Barbados. Barbados is an island country in the Lesser Antilles. It is 21 miles in length and as much as 14 miles in width. It is situated in the western area of the North Atlantic and 62 miles east of the Windward Islands and the Caribbean Sea; east of the islands of Saint Vincent and the Grenadines, and north-east of Trinidad and Tobago. Barbados is outside of the principal Atlantic hurricane belt.
Once a Spanish and Portuguese territorial possession known as Los Barbados or Os Barbados, in 1625 it became an English and later a British, colony. The island has an estimated population of 284,589 people with around 80,000 living in or around Bridgetown, the largest city and the country’s capital. In 1966, Barbados became an independent state and Commonwealth realm, retaining Queen Elizabeth II as Head of State. Barbados is one of the Caribbean’s leading tourist destinations and is the most developed island in the region.
Sports such as cricket and water sports are popular on the island. Music influences include reggae, soca and calypso.
If you are living in Barbados at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Barbados to avoid further UK taxes down the line. A QROPS Barbados is the perfect vehicle to avoid UK taxes if you are considering living or retiring abroad.
QROPS Barbados. The Benefits of a QROPS Transfer for British Expatriates in Barbados
What are the benefits of a QROPS Barbados Pension Transfer for UK expats who work in or retire to Barbados?
• Avoid UK income tax
• Avoid UK dividends tax
• Avoid UK capital gains tax
• Avoid UK inheritance tax
• Security: Secure jurisdictions for your pension. Gibraltar is an EU member state and have strong pension protection regulations.
• Family Protection: Should anything happen to you, your nearest and dearest get the whole pension pot rather than the 55% death tax the Inland Revenue get from you under the UK system.
• Currency Choice: You can choose to transfer your pension(s) into one place in USD or keep it in GBP.
• Access to your pension value online 24 hours a day
• Have the ability to make higher returns with freedom of investment
If you are living in Barbados 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 down the line. A QROPS is an appropriate tax planning vehicle to avoid UK taxes if you are considering living or retiring abroad.
What is a QROPS Barbados?
A Qualifying Recognized Overseas Pension Scheme (QROPS Barbados) 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 5 years of living offshore, the reporting requirements to HMRC cease.
What is the economy like in Barbados?
Since achieving independence in 1966, Barbados has transformed itself from a low-income economy dependent upon sugar production into an upper-middle-income economy based on tourism and the offshore sector. Barbados went into a deep recession in the 1990s after 3 years of steady decline brought on by fundamental macroeconomic imbalances. After a painful readjustment process, the economy began to grow again in 1993. Growth rates have averaged between 3% and 5% ever since. The country’s three main economic drivers are: tourism, the international business sector and foreign direct-investment. These are supported in part by Barbados operating as a service-driven economy and an international business center.
In 1997 Barbados implemented a general taxation which covers most items. Known as the Value-Added Tax (“VAT”) it covers almost all items at a 15% tax rate and a 7.5% for hotel accommodations. Exported goods and services, prescription drugs and a few other specific items are zero rated under the legislation. The VAT replaced several other taxes such as: the Consumption Tax, Stamp Duty, Surcharge, Excise Tax and an Environmental Levy.
The island continues to wean itself off taxes outside the VAT system. In 2002 the Barbados government increased the number of people in Barbados who are exempt from paying tax on their homes. This has steadily grown and the island is now heading for a possible rate of 0% taxation in all other areas.
The government has also played with the idea of making retirement savings as tax exempt to encourage Barbadians to spend less on goods and to encourage Barbadians to save more income during working life.
QROPS Barbados. Which QROPS Jurisdiction is best for a British expat in Barbados
Do I need to move my pension to Barbados?
No. Your pension can be transferred to Gibraltar where it will be out of the UK tax system. It doesn’t matter where you live as long as it is outside the UK, you will enjoy the benefits of a Gibraltar QROPS.
What Tax will I Pay on My QROPS in Barbados?
Personal Income Tax in Barbados
A resident in Barbados but not domiciled individual (not born in Barbados) is subject to tax on his income derived in Barbados and on his income from foreign sources remitted to Barbados. In other words, as a British expat, you will still pay tax on any income remitted into Barbados. Your QROPS will be taxed at 2.5% at source in Gibraltar. This can then be paid to an offshore account or into a local bank account in Barbados.
A person 60 years and over who is in receipt of a pension gets an allowance of $40,000 p.a. before they start paying tax. The tax return must be completed on their assessable income on or before April 30th in the year following that income year. A further spouse allowance is also allowed of $3,000 if the spouse is a dependent. So, most people will get away with zero or a small amount of tax. You can find more information at the Barbados Inland Revenue website along with a tax calculator.
Where and What Will My QROPS be Invested in?
Normally the bulk of a client’s pension monies are invested in the Isle of Man with a company in Gibraltar simply acting as the QROPS trustees and pension administrators. You can invest in a wide range of mutual funds, hedge funds, ETF’s, individual shares, bond funds and various currencies or you can simply choose a conservative, balanced or aggressive investment portfolio in the currency of your choice.
Do I need to live and retire in Barbados?
As long as you live remain outside the UK, you will avoid UK taxes on your QROPS. If you ever return to the UK, your pension returns to UK SIPP rules, but time apportionment relief will be applied if applicable to reduce your tax burden.
For enquiries, please send email to firstname.lastname@example.org
QROPS Barbados article written by QROPS Specialists.QROPS Barbados Pension Transfer for British Expats to Avoid Paying Taxes by Richard Malpass