QROPS Iran. Pension Tax Relief
British expats living in Iran or planning to retire in Iran can now transfer their pension into a QROPS Iran to maximize pension tax relief. British expats living or working in Iran can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like the Gibraltar and will no longer have to pay UK taxes on their pension if they stay offshore.
Iranians who have worked in the UK can also benefit from a QROPS Iran pension transfer to avoid UK taxes if they intend to retire abroad.
Iran officially became an Islamic republic on 1 April 1979, following the Iranian Revolution. Iran is a founding member of the UN, NAM, OIC and OPEC. The political system of Iran, based on the 1979 constitution, comprises several intricately connected governing bodies. The highest state authority is the Supreme Leader. Shia Islam is the official religion and Persian is the official language.
Why live or retire in Iran as a British expat?
For starters, the food. The main Persian cuisines are combinations of rice with meat, chicken or fish and some onion, vegetables, nuts, and herbs. Herbs are frequently used along with fruits such as plums, pomegranates, quince, prunes, apricots, and raisins. Iranians also usually eat plain yoghurt with lunch and dinner; it is a staple of the diet in Iran. To achieve a balanced taste, characteristic flavourings such as saffron, dried limes, cinnamon, and parsley are mixed delicately and used in some special dishes. Onions and garlic are normally used in the preparation of the accompanying course, but are also served separately during meals, either in raw or pickled form. Iran is also famous for its caviar.
With two thirds of Iran’s population under the age of 25, many sports are practised in Iran, both traditional and modern. Iran is the birthplace of polo and Varzesh-e Pahlavani. Freestyle wrestling has been traditionally regarded as Iran’s national sport, however today the most popular sport in Iran is football (soccer) with the national team having reached the World Cup Final Tournament 3 times, and having won the Asian Cup on three occasions. In 1974, Iran became the first country in the Middle East to host the Asian Games. Iran is home to several unique skiing resorts with the Tochal resort being the world’s fifth-highest ski resort (3,730 m/12,238 ft at its highest station), located only 15 minutes away from Tehran. Being a mountainous country, Iran is a venue for hiking, rock climbing and mountain climbing.
Is drinking alcohol illegal in Iran?
Yes. Alcohol consumption is prohibited. There are plenty of cafes and restaurants in Iran where you can smoke ghelyoon, drink tea and watch the world go by. Drinking alcohol is illegal in Iran and is done behind closed doors, but there are underground parties available apparently if you know the locals. Arak is the local moonshine, which Iraqis pour into their tea under the tables. You can be beaten or have money extracted from police if you drink alcohol in Iran. Alternative substance such as Kava are popular. The roots of the plant are used to produce a drink with sedative and anesthetic properties.
Nearly 3,000 Brits live in Iran. All foreign investors doing business in Iran or deriving income from sources in Iran are subject to taxation. If you move your pension into a QROPS Iran, you will be free from paying Iranian income tax. So, you pension will grow tax-free normally in a secure jurisdiction such as Gibraltar. There is just a flat rate of income tax of 2.5% on your pension income which can be paid into a local bank in Iran or into an offshore bank account.
The Benefits of a Pension Transfer to a QROPS Iran
What are the benefits of a QROPS Iran Pension Transfer for British expats in Iran?
• 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 Gibraltar which is under the protection of the British Crown, but has its own strong financial regulations which are tax efficient
What is the economy like in Iran?
The economy of Iran is the 18th largest economy in the world by purchasing power parity (PPP). Iran’s economy is a mixture of central planning, state ownership of oil and other large enterprises, village agriculture, and small-scale private trading and service ventures. Its economic infrastructure has been improving steadily over the past two decades but continues to be affected by inflation and unemployment. In the early 21st century the service sector contributed the largest percentage of the GDP, followed by industry (mining and manufacturing) and agriculture.
What taxes will I pay on my pension if I move to a QROPS?
You are only taxed on income derived in Iran, so a pension transfer to a QROPS Iran will mean zero tax in Iran and the UK as your pension grows. If you set up a Gibraltar QROPS, there would be just a flat rate of tax of 2.5% upon remitting it to an Iranian Bank; or you could pay your pension into an offshore account such as Standard Bank in the Isle of Man.
What is a QROPS Iran?
A Qualifying Recognized Overseas Pension Scheme (QROPS Iran) 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.
If you are living in Iran at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Iran to avoid further UK taxes down the line. A QROPS Iran is a great vehicle to look into to avoid UK taxes if you are considering living or retiring abroad.
Can I Move My UK Pension to Iran?
Do I need to move my pension to Iran?
No. There are no QROPS in Iran. If you are a British expat or have ever worked in the UK, your pension can be transferred to a jurisdiction such as Gibraltar where it can grow without having to pay any UK taxes. Your pension can then be paid into your local bank account or an offshore bank. There would be a flat rate of income tax of 2.5% and you avoid all UK taxes.
Do I need to live and retire in Iran?
No. But, you need to have an offshore address in order to move your pension abroad. You can then live or retire anywhere outside the UK. If you ever move back to the UK, your pension will revert to UK SIPP rules, except you get the bonus of having received some income or tax-free lump sum abroad first which reduces your tax liability.
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Pension tax relief for British expats, QROPS Iran article written by QROPS Specialists.