QROPS in Bermuda for British Expats in Bermuda
For British expats retiring in Bermuda, you can now successfully transfer your pension to avoid tax through a QROPS in Bermuda. For many British expats in Bermuda, the Caribbean is a dream retirement destination.
Even Bermudans who have worked in the UK and wish to retire offshore can transfer their private UK pensions offshore to avoid 55% tax upon death and UK income taxes on their hard earned pensions.
Bermuda 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 1,030 kilometres (640 mi) to the North West. Bermuda is in the sub-tropics and its largest sector is finance followed by tourism. Many British expatriates in Bermuda live in or around Hamilton.
The average temperature is 17˚C to 28˚C. The currency is the Bermudian Dollar, which is pegged to the $US. US notes and coins can be used as well.
QROPS in Bermuda. UK Pension Transfer to Bermuda
If you are a British expatriate in Bermuda, you can now move your UK pension abroad in order to avoid UK taxes on your pension. Many expats enquire about QROPS in Bermuda. Many expats think of moving their pension to Bermuda as it is still under the British Crown and has many tax benefits. However, the biggest misunderstanding about QROPS is that you do not need to move your QROPS to the country you are moving to. So, even if you retire to Bermuda, you do not necessarily need to move your pension to a QROPS in Bermuda.
There have been a number of changes to the QROPS market recently and now you are better off < ahref="http://www.qropsspecialists.com/qrops-gibraltar-gets-the-green-light/">moving your QROPS to Gibraltar. Why would you move to a QROPS in Gibraltar? Well, Gibraltar is an EU member state, but the tax rules mean that as far as the UK is concerned, you pay no income tax, no capital gains tax, no dividends tax and no inheritance tax. Thus, you pass on your entire pension to your loved ones upon death. Furthermore, you fully protect your estate as there is no inheritance tax. Normally, in the UK, your pension would be taxed 55% upon death. A QROPS pension transfer to Gibraltar avoids this 55% tax and UK income taxes of up to 50%.
Tax on a QROPS in Bermuda
Taxation in Bermuda
A Bermuda pension. In Bermuda there is no income tax, capital gains tax, VAT, sales or use tax or wealth tax. Annual government fees are imposed on businesses and there is a payroll tax. Local businesses must be controlled by Bermudians but offshore operations take place through ‘exempt’ or ‘permit’ companies. A pension transfer offshore through a QROPS in Bermuda or QROPS in Gibraltar protects you from UK and Bermudan taxes. So what taxes would I pay on my QROPS? Your tax is deducted at source in Gibraltar and you just pay a flat rate tax of 2.5% on any income drawn. There is no tax in Bermuda.
Bermuda Double Taxation Treaties
Since Bermuda does not levy direct taxes, there are no double tax treaties between Bermuda and other nations. There is however a tax treaty with the US which exempts insurance premium payments from US franchise taxes, and grants tax breaks to US companies holding conventions in Bermuda. If you opt for a QROPS in Bermuda, you avoid UK and Bermudan taxes on your pension.
Benefits of a QROPS in Bermuda
A move to a QROPS in Gibraltar allows the following benefits:
• No UK or Bermudan income tax
• No UK or Bermudan capital gains tax
• No UK or Bermudan dividends tax
• No UK or Bermudan inheritance tax
• Protection of your pension. If the investment portfolio goes bust, you are guaranteed at least 90% of your monies returned.
• Protection of your estate: the whole of your pension pot gets passed to your nearest and dearest upon death.
• No need to buy an annuity. It is your choice.
• Freedom of currency choice. You can hold your pension in GBP, EUR or $USD
• Freedom of investment. You can invest in most mutual funds, shares, ETF’s, bonds or hold your pension in cash.
• Access to 30% of your pension as a lump sum on transfer.
• No reporting requirements to the Inland Revenue after 10 years abroad.
• Pay your pension into your local bank where live in abroad or to an offshore account.
• Most UK pensions are now tied into CPI (Consumer Price Index) measure of inflation, which means that your pension will only rise on average of 2.0% per year. Transfer to a QROPS in Bermuda and have the chance of making 7.0%+ per year after fees.
For a free pension transfer analysis, please send the transfer value for your pension pot and pension details to:
QROPS in Bermuda article written by QROPS SpecialistsQROPS in Bermuda by Richard Malpass