It is important to seek out a QROPS specialist when seeking out QROPS help. A QROPS specialist will be able to help you find the lowest qrops fees, best jurisdiction for tax efficiency as well as protecting your pension by maximizing security.
A QROPS or Qualifying Recognized Overseas Pension Scheme came into effect on April 6, 2006 simplifying an older scheme which allowed people retiring overseas to draw their pension without any UK tax liabilities. QROPS opened the floodgates to expats who had retired abroad or intended to retire abroad, giving them the choice of no longer paying UK taxes on their pension.
Do I need to tranfer my pension to the same country I am retiring to?
No. It is more important to find the optimal jurisdiction for your QROPS than finding one in the country you retire to. A typical pension transfer for someone retiring to Thailand or Spain would be to transfer their pension to a Guernsey QROPS where it can grow tax free and there would be no income tax on drawdown and no inheritance tax when the member passes their pot on to their nearest and dearest.
Then, when you are in drawdown, you can set up your pension to pay you an income into an offshore bank account or bank in the country you reside.
Will I pay any more taxes on my pension after the QROPS transfer?
It will depend on the country you live in. The QROPS will grow tax free and then the income tax you pay on drawdown depend on the laws of the country you live in and whether they have a Double Tax Agreement with the jurisdiction where your QROPS is held. Typically, you can set up your pension income in a tax efficient way where you can avoid most or all taxes on your income. Also, if anything happens to you, the entire pot gets passed on to your nearest and dearest.
Do I need to be offshore to move into a QROPS?
No. If you live on the UK and intend on retiring or moving abroad, you can move your pension into a QROPS today. However, you need to be offshore for 5 years to get the full benefits of a QROPS. The advantage of moving today is avoiding any future tax increases in the UK concerning pensions or any closing of loopholes or changes in regulations.
When can I draw my pension?
QROPS Help. You can take up to 30% as a lump sum provided you have been offshore for 5 years (only 25% if less than 5 years). This is provided you haven’t taken a lump sum already in the UK. You can then draw on your pension at 55.
What happens if I move back to the UK
If you move back to the UK, your QROPS would lose all its benefits and would refer to the normal rules for a UK SIPP.
Can I cash in my pension and get a 100% lump sum?
Whilst many advisers have been flogging QROPS as a 100% lump sum in jurisdictions in New Zealand, this is generally against the spirit of the pension rules. However, the KiwiSaver scheme seems to have been cleared for the moment. However, you may be open to a retrospective clawback of up to 55% of your pension. The safest way is to move a QROPS into a jurisdiction which only allows a 30% drawdown.
QROPS Help: Please contact one of our QROPS specialists if there are extenuating circumstances which means you require access to more than 30% of your pension and we can guide you.
Key Benefits of QROPS
Beat the tax man at his own game
- Tax Efficiency. The ability to avoid income tax, capital gains tax, dividends tax and inheritance tax
- Ease of access. Get all your pensions transferred to the same place, where you can acces them online whenever you want.
- Freedom of investment. The ability to invest in virtually any bonds, cash, money markets, mutual funds, ETF’s that you want. This means you have the opportunity to potentially make more out of your pension or if you want to be safe, invest in funds with little or no correlation to the stock market
- Currency freedom. Hedge your bets by holding other currencies such as the US$, Swiss Francs, EUR, gold and silver.
- 90% protection and security. Move your pension offshore to the Isle of Man or Guernsey. These jurisdictions are protected by the British Crown, but have their own tax structures. If your pension company goes bust, be assured you will get at least 90% of your money back.
- No capital gains tax on commercial property, e.g. hotels and shops.
- No need to buy an annuity at 75. No death tax charge of 55%. Pass the whole of your pension on to your nearest and dearest. Name your beneficiaries as you see fit.
- Secure jurisdiction. 90% protection.
- No more UK taxes on your pension.
- Investment freedom. Ability to invest in gold & silver.
- Currency Choice.
- Whole pension goes to your family upon death.
- All your pensions in one place online.
Can I move my residential properties into a QROPS
No. QROPS only allow commercial properties such as shop houses, B&B’s, guesthouses and hotels. However, if you need QNUPS.
For QROPS enquries and advice: email@example.com
QROPS help article by QROPS Specialists.