QROPS Brunei. Pension Tax Relief for British Expats in Brunei
British expats living in Brunei or who wish to retire in Brunei can now transfer their pension into a QROPS Brunei to maximize pension tax relief. British expatriates living in Brunei can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like Gibraltar or New Zealand and will no longer have to pay UK taxes on their pension as long as they stay offshore. A pension transfer to a QROPS for British expatriates in Brunei protects your pension from UK taxation and increases the number of investment opportunities your pension can invest in as well as allowing currency flexibility.
You can pass on 100% of your pension pot on to your spouse, children or nominated beneficiaries upon death rather than pay the 55% tax that the UK government imposes. Anyone from Brunei who has worked in the UK can also transfer their UK pension offshore to avoid UK taxation. Furthermore, there are many trust structures we can use so that rather than a 100% lump sum upon death, it can provide an income for life to any beneficiaries you choose.
Why move to Brunei or retire in Brunei as a British expat?
More than 6,400 Brits living or working in Brunei. Foreign workers make-up about 40 percent of the work force. There is NO PERSONAL INCOME TAX in Brunei. There are no exchange controls and you can move money in and out easily. The cost of living is much cheaper than the UK with petrol prices in particular being cheap at less than 20p per litre! The Brunei Dollar is approximately equivalent to the Singaporean Dollar. Brunei became independent from Britain in 1984 and, owing to its oil and gas reserves, is a wealthy country. It is the fourth largest producer of liquefied natural gas in the world. Malay is the official language, but most people understand some English. For beef eaters, the government owns a cattle farm in Australia that supplies most of the country’s beef. A QROPS Brunei will allow you to get the most out of your pension, paid gross free of UK taxes.
Brunei has tropical climate with a uniform, all year-round high temperature of about 32 degrees each day and minimum of around 24 degrees at night. High humidity and heavy rainfall are present all year round. There is no distinct wet season. Three quarters of the country is covered in tropical rainforests and eco-tourism is of growing importance. Brunei is more socially conservative than the UK. Alcohol is not sold and consumption of alcohol is prohibited in public. Small quantities may be brought in from overseas for private use. Like Singapore, drug trafficking carries a mandatory death penalty. British Oil workers, those in the financial industry, teachers, engineers and diplomats can all find jobs in Brunei. A QROPS Brunei is an appropriate tax planning vehicle for British expats seeking to retire in Brunei.
Brunei, officially the State of Brunei Darussalam or the Nation of Brunei, the Abode of Peace is a sovereign state located on the north coast of the island of Borneo, in Southeast Asia. Apart from its coastline with the South China Sea, it is completely surrounded by the state of Sarawak, Malaysia, and in fact it is separated into two parts by Limbang, which is part of Sarawak. It is the only sovereign state completely on the island of Borneo, with the remainder of the island belonging to Malaysia and Indonesia. Brunei’s population is around 400,000 (July 2010).
Brunei can trace its beginnings to the 7th century, when it was a subject state of the Srivijayan empire under the name P’o-li. It later became a vassal state of Majapahit Empire before converting to Islam in the 15th century. At the peak of its empire, the sultanate had control that extended over the coastal regions of modern-day Sarawak and Sabah, the Sulu archipelago, and the islands off the northwest tip of Borneo. The thalassocracy was visited by Ferdinand Magellan in 1521 and fought the Castille War in 1578 against Spain. Its empire began to decline with the forced ceding of Sarawak to James Brooke and the ceding of Sabah to the British North Borneo Chartered Company. After the loss of Limbang, Brunei finally became a British protectorate in 1888, receiving a resident in 1906. In the post-occupation years, it formalised a constitution and fought an armed rebellion. Brunei regained its independence from the United Kingdom on 1 January 1984.
QROPS Brunei. Benefits of a Pension Transfer to Brunei
What are the advantages of a QROPS Pension Transfer for British Expats in Brunei?
• Avoid UK income tax
• Avoid UK dividends tax
• Avoid UK capital gains tax
• Avoid UK inheritance tax
• Currency Choice. You can change your pension into SGD, USD, EUR or keep it in GBP.
• 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.
• Security: Transfer to a secure jurisdiction such as Gibraltar which has its own strong financial regulations.
What is a QROPS Brunei?
A Qualifying Recognized Overseas Pension Scheme (QROPS Brunei) 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 of Brunei like?
Economic growth during the 1970s and 1990s, averaging 56% from 1999 to 2008, has transformed Brunei Darussalam into a newly industrialised country. Brunei is ranked 4th in the world by gross domestic product per capita at purchasing power parity. It is almost totally supported by exports of crude oil and natural gas, with revenues from the petroleum sector accounting for over half of GDP. It is the 3rd largest oil producer in South-East Asia.The government provides for all medical services and subsidizes food and housing. The government has shown progress in its basic policy of diversifying the economy away from oil and gas.
The Brunei Government actively encourages more foreign investment. New enterprises that meet certain criteria can receive pioneer status, exempting profits from income tax for up to 5 years, depending on the amount of capital invested. The normal corporate income tax rate is 30%. There is no personal income tax or capital gains tax. A QROPS Brunei will allow your UK pension to be paid free of any income tax.
If you are living in Brunei at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Brunei to avoid further UK taxes down the line.
QROPS Brunei. What is the Tax on a QROPS for British Expats in Brunei
Do I need to move my pension to Brunei?
No. There are no QROPS trustees in Brunei. Your pension can be transferred to Gibraltar where it will be out of the UK tax system as long as you stay offshore.
What is personal income tax in Brunei for British Expats?
Although the Income Tax Act provides for the taxation of income derived from individuals, the income is tax exempt under the first schedule (1)(a) to the Income Tax Act.
In other words, you would pay no UK taxes and no taxes in Brunei. The only taxes would be a flat rate of tax of 2.5% on your pension income which would be deducted at source in Gibraltar.
Click here to get more income tax info from Brunei government’s website.
Do I need to live and retire in Brunei?
As long as you live outside the UK, e.g. in Brunei, you can move your pension offshore to a QROPS in Gibraltar or New Zealand. If you ever return to the UK, your QROPS would follow SIPP rules and you would pay UK taxes, but if you have been offshore for 5 years, you can take the extra tax lump sum and would be taxed less on your pension as income taken whilst away would not be taxed either.
For enquiries, please send email to firstname.lastname@example.org
Pension tax relief for British expats, QROPS Brunei article written by QROPS Specialists.QROPS Brunei Pension Transfer for British Expats to Avoid Paying Taxes by Richard Malpass