QROPS Indonesia Pension Transfer for British Expats to Avoid Paying Taxes

QROPS Indonesia. Pension Tax Relief for British Expats in Indonesia

Both British expats in Indonesia and Indonesians who have worked in the UK can now avoid UK taxes though a transfer to a QROPS Indonesia. You may not know that you get taxed 55% upon death in the UK whilst drawing your private pension and also face UK income taxes of between 0% and 55%. A transfer to a QROPS in Gibraltar or New Zealand would avoid UK taxation.

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QROPS Indonesia Pension Transfer for British Expats

Why live or retire in Indonesia as a British expat?

Over 14,000 Brits live in Indonesia. With over 238 million people, it is the world’s 4th most populous country, and has the world’s largest population of Muslims. Indonesia comprises 17,508 islands and 33 provinces. Indonesia is a republic, with an elected legislature and president. The capital is Jakarta. The country shares land borders with Papua New Guinea, East Timor, and Malaysia. Other neighboring countries include Singapore, Philippines, Australia, and the Indian territory of the Andaman and Nicobar Islands. Indonesia is a founding member of ASEAN and a member of the G-20 major economies. The Indonesian economy is the world’s 18th largest economy by nominal GDP and 15th largest by purchasing power parity.

If you are a British expat in Indonesia or an Indonesian who has worked in the UK and want to transfer your pension, you can contact QROPS Specialists today to discuss your options. We can help you transfer your UK pension to a secure jurisdiction such as a QROPS in New Zealand or a QROPS in Gibraltar where your pension will grow tax free and be paid gross with no tax. Furthermore, your family will be protected from UK inheritance tax.

Benefits of Moving Your Pension to a QROPS Indonesia

What are the benefits of a QROPS Indonesia Pension Transfer for British expats?

• Avoid UK income tax

• Avoid UK dividends tax

• Avoid UK capital gains tax (CGT)

• Avoid UK inheritance tax (IHT)

• Currency choice. You can choose to have your pension transferred to a QROPS denominated in USD, EUR or keep it in GBP

• Have the ability to make higher returns with freedom of investment

Family Protection: Upon death, the entire pension pot gets passed on to your nearest and dearest

Security: The pension is held in a secure jurisdiction such as New Zealand or Indonesia which is under the protection of the British Crown, but has its own strong financial regulations which are tax efficient

Tax on QROPS Indonesia

In Indonesia, you get taxed on your worldwide income. Exclusions include housing, cars, school fees, as well as income from inheritance. You need to seek advice from local tax specialists on your Indonesian tax position. You can get your QROPS paid into your local bank account or an offshore bank account. We can help you set up an offshore account in GBP, USD or EUR.

QROPS New Zealand for British Expats in Indonesia

  • Avoids All Taxation in UK and NZ
  • Currency choice of GBP, EUR or USD
  • 30% lump sum at 55 available
  • 100% of any increase in pension pot after transfer available as a further lump sum
  • 5 investment strategies available dependent on your risk profile

QROPS Gibraltar for British Expat in Indonesia

  • Avoids all UK taxation
  • Flat 2.5% income tax rate at source in Gibraltar
  • Currency choice of GBP, EUR or USD
  • 30% lump sum at 55 available
  • Much wider investment range allowed including shares, mutual funds, ETF’s, bond fund, hedge funds, high interest bank notes, etc.

Personal Income Tax in Indonesia

An individual is regarded as a tax resident if they fulfil any of the following conditions:

They resides in Indonesia;
They are present in Indonesia for more than 183 days in any 12-month period;
They are present in Indonesia during a fiscal year and intends to reside in Indonesia.

Indonesian Rupiahs Tax Rate %

  • Rp 1 – 50 million 5%
  • Rp 50 – 250 million 15%
  • Rp 250 million – 500 million 25%
  • Rp 500 million+ 30%

An extra 20% is also levied on people who do not have a tax number on top of the progressive income tax rates above.

Deductions or personal allowances for an individual are Rp. 15,840,000; The wife is allowed 1,320,000 and up to three children at Rp. 1,320,000 each; occupational expenses (5% of gross income, max. Rp. 500,000 per month)
6,000,000; employee contribution to Jamsostek for old age security savings (2% of gross income) full amount;
pension maintenance expenses (5% of gross income, max. Rp 200,000/month) 2,400,000.

UK State Pension in Indonesia

Those with a UK state pension and have it paid into an Indonesian account can still get the state pension, but unfortunately, it is not linked to the inflation rate (CPI), which means your state pension is frozen and would receive a smaller pension.

For those who wish to complain, there is a petition to get an increased pension in Indonesia in line with inflation, but don’t hold your breath. The UK government is desperately trying to cut UK debt and government spending, so don’t expect to see it anytime soon.

If you are living in Indonesia at the moment, you can take advantage of your offshore status by transferring into a QROPS Indonesia to avoid UK taxes on your pension.

What is a QROPS Indonesia?

A Qualifying Recognized Overseas Pension Scheme (QROPS Indonesia) 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.

Are There Any QROPS in Indonesia?

Do I Need to Move My Pension to Indonesia?

No. There are currently no QROPS in Indonesia. However, your pension can be transferred to a secure jurisdiction such as New Zealand where it will be out of the UK tax system and your pension will be paid gross and grow tax free.

What Happens to QROPS When I Leave Indonesia?

As long as you retire outside of the UK, your QROPS will continue to grow tax free and avoid taxes upon death in the UK. If you ever returned to the UK, you can pay less tax by taking the full 30% lump sum offshore first and you would also pay a lesser tax upon death.

For enquiries, please send email to info@qropsspecialists.com

QROPS Indonesia article written by QROPS Specialists.

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