QROPS Jamaica. Pension Tax Relief for British Jamaicans and British Expats
British expats living in Jamaica or wishing to retire in Jamaica can now transfer their pension into a QROPS Jamaica to maximize pension tax relief. British expats living in Jamaica can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like the Gibraltar or New Zealand and will no longer have to pay UK taxes on their pension if they stay offshore.
British Jamaicans can also transfer their pensions offshore if they intend to retire in Jamaica or outside the UK. This way, they would avoid 55% tax upon death that the UK imposes as well as UK income tax of up to 50%. There are now more than 800,000 British Jamaicans. Those who have worked in London Transport, British Rail and the NHS may transfer out their pensions to avoid tax.
Why live or retire in Jamaica as a British expat?
More than 31,000 British expats live in Jamaica. Britain and Jamaica have a rich history and many Jamaicans left Jamaica in the 70’s and 80’s to come and work in Britain. Jamaica was a British colony from 1655 until 1962, but now it is an independent country with nearly 3m people. It still remains a Commonwealth country with QEII as the head of state.
Sunny weather, blue seas and cheaper day to day living makes Jamaica an attraction. Also, many British Jamaicans retire out there as well as many Brits retiring out there through marriage.
Benefits of Transferring a Pension to a QROPS Jamaica
What are the benefits of a QROPS Jamaica Pension Transfer for British expats?
• 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 or New Zealand where it will grow tax free.
What Taxes Do I Pay on My QROPS in Jamaica?
Pensioners resident in Jamaica for a period of 6 months or more must pay tax on their worldwide income.
For 2013, they get a pension exemption of $80,000, an age exemption of $80,000 and an income tax threshold of $507,312.
• People under 65 years old, who receive a pension from a Statutory Pension Scheme e.g. NIS, or an Approved Superannuation Scheme, are entitled to the tax exemption amount of $80,000 against that Pension income only plus $ 507,312 making an income tax threshold, totaling $587,312.
• Pensioners who are 65 years and over, are entitled to an exemption of $80,000 forage relief and $80,000 pension relief, plus $507,312 making an income tax threshold, totaling $667,312.
Those over the threshold will pay 25% tax. More on Jamaican taxes here.
So, a move to a QROPS in New Zealand would mean no NZ taxation, no UK taxation and you would only pay Jamaican taxes if your income is above the threshold mentioned above.
A move to a QROPS in Gibraltar would also draw an additional 2.5% income tax upon drawdown, but on the positive side, you would be allowed to invest in almost anything you want – shares, ETF’s, mutual funds, cash, etc.
What is a QROPS Jamaica?
A Qualifying Recognized Overseas Pension Scheme (QROPS Jamaica) 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 Jamaica at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS to avoid further UK taxes down the line.
What QROPS Companies are in Jamaica?
Do I need to move my pension to Jamaica?
No. There are only two recognized pension schemes with Jamaica and their investment selection is limited. Your pension can be transferred to a secure jurisdiction such as NZ or Gibraltar in order to increase your investment options. Your pension will then be out of the UK tax system and 100% of your pension pot will be passed on to your loved ones upon death.
Do I need to live and retire in Jamaica?
No, you can live anywhere offshore. As long as you are outside the UK, your QROPS will grow tax free. If you ever return to live permanently in the UK, your pension will simply return to UK Self Invested Pension Plan (SIPP) rules, but the advantage is that you will have already taken an increased lump sum already, so your tax bill would be smaller.
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Pension tax relief for British expats, QROPS Jamaica article written by QROPS Specialists.QROPS Jamaica Pension Transfer for British Expats to Avoid Paying Taxes by Richard Malpass