QROPS Bermuda. Pension Tax Relief for British Expats in Bermuda
British expats living abroad can now transfer their pension into a QROPS Bermuda to maximize pension tax relief and avoid UK taxes on their pension. UK expats living in Bermuda 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 whilst they stay offshore.
Why live or retire in Bermuda as a British expat?
If you are thinking of moving to Bermuda, around 600 Britons are estimated to live there, although a 1991 census estimates UK immigrants constituted 30.6% of the immigrant population; U.S. make up 19.9%; Canada, 10.5%; as well as Portugal and the Azores, 13.5%. Bermuda has no personal income tax.
Bermuda, officially the Bermudas or Somers Islands or Sommer Islands is a British overseas territory in the North Atlantic Ocean. Located off the east coast of the United States, its nearest landmass is Cape Hatteras, North Carolina, about 640 miles to the west-northwest. It is about 853 miles south of Halifax, Nova Scotia, Canada, and 1,100 miles northeast of Miami, Florida. Its capital city is Hamilton.
Bermuda was discovered in 1505 by Spanish navigator Juan de Bermúdez (who claimed to find the island inhabited only by pigs) after whom the islands are named, who claimed it for the Spanish Empire. Unoccupied, the island was settled by England in 1609, making it the oldest and most populous remaining British overseas territory. Its first capital, St George’s, was established in 1612 and is the oldest continuously inhabited English town in the Americas.
Bermuda has an affluent economy, with finance as its largest sector followed by tourism. In 2005, Bermuda was even claimed to have the world’s highest GDP per capita, yet these statistics are hard to verify as Bermuda is not classified as a country but rather as a territory of the U.K. It has a subtropical climate. Bermuda makes up the easternmost point of the so-called “Bermuda Triangle,” a region of sea in which a number of aircraft and surface vessels have allegedly disappeared under mysterious circumstances. However, most people come to Bermuda for the sun, sea, sand and beach life.
QROPS Bermuda. Benefits for British Expatriates in Bermuda
What are the benefits of a QROPS Bermuda pension transfer?
• Avoids UK income tax
• Avoids UK dividends tax
• Avoids UK capital gains tax
• Avoids UK inheritance tax
• Has the ability to make higher returns with freedom of investment
• Protection: if anything happens to you, your nearest and dearest gets the entire pension pot
• Currency: You can choose to hold your pension in GBP or change your pension into USD, as in February 1970, Bermuda converted from its former currency, the Bermudian pound, to a decimal currency, the Bermuda dollar, pegged to the U.S. dollar.
• Security: you can move your pension to a secure jurisdiction with a strong regulatory framework like Gibraltar, an EU sovereign state.
What is a QROPS Bermuda?
A Qualifying Recognized Overseas Pension Scheme (QROPS Bermuda) 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 Bermuda?
Bermuda enjoys one of the highest per capita incomes in the world, having successfully exploited its location by providing financial services for international firms and luxury tourist facilities for 360,000 visitors annually. The tourist industry, which accounts for an estimated 28% of GDP, attracts 84% of its business from North America. International business contributes over 60% of Bermuda’s economic output; a failed independence vote in late 1995 can be partially attributed to Bermudian fears of scaring away foreign firms. Government economic priorities are the further strengthening of the tourist and international financial sectors.
The industrial sector is small, and agriculture is now severely limited by a lack of suitable land. About 80% of food is imported. Even though import duties are high, wages have kept up with the cost of living, and poverty, by U.S. standards, appears to be practically nonexistent. Bermuda imposes no income, sales, or profit taxes. However, it does levy a real estate tax and a payroll tax.
If you are living in Bermuda at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Bermuda to avoid UK taxes further down the line.
QROPS Bermuda. Tax on a QROPS in Bermuda for British Expats
Do I need to move my pension to Bermuda?
No. Your pension can be transferred to a QROPS in Gibraltar or New Zealand where it will be out of the UK tax system. In New Zealand, the QROPS would face zero taxation, but the investment strategies would be limited to 5 investment strategies, so may be OK for smaller pensions. In Gibraltar, it would face a 2.5% income tax at source in Gibraltar. Neither would face any tax on remittance to Bermuda or you could have it paid to an offshore bank account. There would be no tax upon death.
Personal Income Tax in Bermuda
There is no personal income tax in Bermuda.
Do I need to live and retire in Bermuda?
As long as you live outside the UK, for example in Bermuda, you can move your pension offshore to Gibraltar or New Zealand. It doesn’t matter where you live afterwards as long as it is outside the UK and you will benefit from the tax-free growth of the QROPS. If you ever return to the UK, Your QROPS would follow UK SIPP rules, but time apportionment would be attributable.
For enquiries, please send email to firstname.lastname@example.org
Pension tax relief for UK expats, QROPS Bermuda article written by QROPS Specialists.QROPS Bermuda Pension Transfer for UK Expats to Avoid Paying Taxes by Richard Malpass