QROPS British Virgin Islands. Pension Tax Relief for British Expats in BVI
British expats moving to the British Virgin Islands or wishing to retire to the British Virgin Islands (BVI) can now transfer their pension into a QROPS British Virgin Islands to maximize pension tax relief. British expats in BVI 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 if they stay offshore. They avoid the 55% tax upon death in the UK. They would pay a flat rate 2.5% income tax in Gibraltar rather than UK taxes.
Moving to the British Virgin Islands. Why retire in the British Virgin Islands (BVI)?
There are over 1,000 Britons living in the British Virgin Islands. The Virgin Islands, often called the British Virgin Islands (BVI), is a British overseas territory, located in the Caribbean to the east of Puerto Rico. The islands make up part of the Virgin Islands archipelago, the remaining islands constituting the U.S. Virgin Islands. British Virgin Islands government publications had traditionally continued to commence with “The Territory of the Virgin Islands”, but recently, more legislation now simply refers to the Territory as the “British Virgin Islands”. The climate is sub-tropical varying between 29 and 32 Degrees Centigrade.
The British Virgin Islands consist of the main islands of Tortola, Virgin Gorda, Anegada and Jost Van Dyke, along with over 50 other smaller islands and cays. Approximately 15 of the islands are inhabited. The capital, Road Town, is situated on Tortola, the largest island which is approximately 12 miles long and 3 miles wide. The islands have a total population of about 22,000, of whom approximately 18,000 live on Tortola. 83.36% of the population are Afro-Caribbean, 7.28% White (mostly British and Portuguese), 5.38% Multiracial (mostly Puerto Rican), 3.14% East Indian and 0.84% others. The main currency is USD.
QROPS British Virgin Islands. The Benefits of a QROPS for British Expats in BVI
What are the benefits of a QROPS British Virgin Islands transfer for British expats?
• 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
• Protection: if anything happens to you, your nearest and dearest gets the entire pension pot, unlike UK rules where a 55% tax is applied
• Currency Choice: Move your pension into the local currency of USD or you can keep it in GBP.
• Security: Secure QROPS jurisdiction such Gibraltar assures strong financial regulations and pension protection.
What is QROPS British Virgin Islands?
A Qualifying Recognized Overseas Pension Scheme (QROPS British Virgin Islands) 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.
What is the economy like in the British Virgin Islands?
Since the 1960s, the islands have diversified away from their traditionally agriculture-based economy (they used to lean heavily on sugar cane) towards tourism and financial services, becoming one of the wealthiest areas in the Caribbean. As an offshore financial centre, the British Virgin Islands enjoys one of the more prosperous economies of the Caribbean region, with a per capita average income of around $38,500 (2004 est.)
51.8% of the Government’s revenue comes directly from licence fees for offshore companies, and considerable further sums are raised directly or indirectly from payroll taxes relating to salaries paid within the trust industry sector (which tend to be higher on average than those paid in the tourism sector). Tourism accounts for 45% of national income.
In 2000 KPMG reported in its survey of offshore jurisdictions for the United Kingdom government that over 41% of the world’s offshore companies were formed in the British Virgin Islands.
If you are living in British Virgin Islands 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 can be utilized to avoid UK taxes if you are considering living or retiring abroad.
QROPS British Virgin Islands. Tax on QROPS in BVI
There is no personal income tax in BVI, so when you remit your QROPS, it would be received tax free.
Do I need to move my pension to British Virgin Islands?
No. Your pension can be transferred to Gibraltar where it will be outside of the UK tax system. BVI does not have any personal income tax, so the only tax you would pay would be the flat rate tax of 2.5% which would be deducted at source in Gibraltar before being sent to your BVI account or offshore account.
Do I need to live and retire in British Virgin Islands?
As long as you remain outside the UK, e.g. in British Virgin Islands, you can move your pension offshore and retain the benefits of a QROPS. Once you have transferred your pension it will grow free of tax. If you ever return to the UK, it reverts to a typical UK SIPP.
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QROPS British Virgin Islands article written by QROPS Specialists.