QROPS Kuwait. Pension Tax Relief
British expats living in Kuwait or planning to retire in Kuwait can now transfer their pension into a QROPS Kuwait to maximize pension tax relief. British expats living or working in Kuwait can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like Gibraltar and will no longer have to pay UK taxes on their pension if they stay offshore. If you are a Kuwait national and have built up a substantial pension in the UK, you can also transfer your UK pension to a QROPS Kuwait to a secure jurisdiction such as Gibraltar, so you can pass the whole pension on to your wife or children rather than the UK government upon death.
Kuwaitis working in the UK can also transfer their pension offshore to avoid taxes in the UK. Any Kuwaiti national who has built up a substantial pension can transfer their pension to avoid 55% tax upon death and UK income taxes of up to 50%.
Kuwait is a constitutional monarchy with a parliamentary system of government, with Kuwait City serving as the country’s political and economic capital. The country has the world’s fifth largest oil reserves and petroleum products now account for nearly 95% of export revenues, and 80% of government income. Kuwait is the eleventh richest country in the world per capita. In 2007, it had the highest human development index (HDI) in the Arab world. Kuwait is classified as a high income economy by the World Bank and is designated as a major non-NATO ally of the United States
Why live or retire in Kuwait if you are a British expat?
Over 7,000 Brits live and work in Kuwait. After Kuwait gained independence from the United Kingdom in 1961, the nation’s oil industry saw unprecedented economic growth. In 1990, Kuwait was invaded and annexed by neighboring Iraq. The seven month-long Iraqi occupation came to an end after a direct military intervention by United States-led forces. Around 773 Kuwaiti oil wells were set ablaze by the retreating Iraqi army resulting in a major environmental and economic catastrophe. Kuwait’s infrastructure was badly damaged during the war and had to be rebuilt.
While, unlike neighbouring Saudi Arabia, the Islamic dress code is not compulsory, many of the older Kuwaiti men prefer wearing dish dasha, an ankle-length white shirt woven from wool or cotton while a minority of women wear the abaya, a black over-garment covering most parts of the body. This attire is particularly well-suited for Kuwait’s hot and dry climate. Western style clothing is very popular among the youth of Kuwait.
Seafood has been the mainstay of the Kuwaiti diet for centuries. The Arabs in the Persian Gulf region played a crucial role in the spice trade between India and Europe and spices have remained an important ingredient of Kuwaiti cuisine.
Can you drink alcohol legally in Kuwait?
No. You can’t drink in public places. You can smoke shisha, sip tea, non-alcoholic cocktails and drink coffee. If you know the right locals, you can get invited to parties with alcohol. But, it is illegal. Otherwise, it is shopping, movies, cafes and restaurants.
What are the Taxes on a QROPS Kuwait?
What are the taxes on my pension as a British expat in Kuwait?
Whether you are working in Kuwait or simply receiving your pension in Kuwait, there is no personal income tax in Kuwait (21st September 2011). However, the government is thinking of imposing a tax. If so, it would likely not include pension income, so a QROPS Kuwait pension transfer should be free from both UK tax and taxes in Kuwait. You can choose to have your pension paid into an offshore account or directly into a Bank in Kuwait.
If you are living or working in Kuwait at the moment, you can take advantage of your offshore address to transfer your pension into a QROPS Kuwait to avoid UK taxes on your pension.
If you choose to transfer to a QROPS in Gibraltar, there would be
Zero UK taxation
A 2.5% flat rate of income tax on your pension at source in Gibraltar
No income tax in Kuwait (as it stands)
Benefits of a QROPS Kuwait for a British Expat
What are the benefits of a QROPS Kuwait 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 Gibraltar which is under the protection of the British Crown, but has its own strong financial regulations which are tax efficient
What is QROPS Kuwait?
A Qualifying Recognized Overseas Pension Scheme (QROPS Kuwait) 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 Kuwait at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Kuwait to avoid further UK taxes down the line.
What is the economy in Kuwait like?
Before the discovery of oil, pearling formed a crucial part of Kuwait’s economy. Pearl fishery, known as ghaus, suffered decline after the advent of Japanese pearl farming. Kuwait has a GDP (PPP) of US$167.9 billion and a per capita income of US$81,800, making it the 5th richest country in the world, per capita.
According to the 2008 Index of Economic Freedom, Kuwait has the second-most free economy in the Middle East. In March 2007, Kuwait’s foreign exchange reserves stood at US$213 billion. The Kuwait Stock Exchange, which has about 200 firms listed, is the second-largest stock exchange in the Arab world with a total market capitalization of US$235 billion. In 2007, the Kuwaiti government posted a budget surplus of US$43 billion.
Kuwait has a proven crude oil reserves of 104 billion barrels (15 km³), estimated to be 10% of the world’s reserves. According to the Kuwaiti constitution, all natural resources in the country and associated revenues are government property; being a tax-free country, Kuwait’s oil industry accounts for 80% of government revenue. Petroleum and petrochemicals account for nearly half of GDP and 95% of export revenues. Increase in oil prices since 2003 resulted in a surge in Kuwait’s economy. Kuwait’s current oil production of 2.8 million bpd is expected to increase to 4 million bpd by 2020.
Other major industries include shipping, construction, cement, water desalination, construction materials and financial services. Kuwait has a well developed banking system and several banks in the country date back to the time before oil was discovered.
Should I Move My Pension to a QROPS in Kuwait?
Do I need to move my pension to Kuwait?
No. There are no QROPS in Kuwait. Your best bet as a British expat in Kuwait is to leave your pension where it is if you have a small pension or transfer to a QROPS in Kuwait, so your family is protected upon death and you reduce your income tax exposure. Your pension can then be paid into your local bank in Kuwait or into an offshore bank.
Do I need to live and retire in Kuwait?
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 typical UK SIPP rules. If you retire anywhere else in the world, you still avoid UK taxes, but you would likely pay income taxes in the country you reside in.
For enquiries, please send email to firstname.lastname@example.org
Pension tax relief for UK expats, QROPS Kuwait article written by QROPS Specialists.QROPS Kuwait Pension Transfer for British Expats to Avoid Paying Taxes by Richard Malpass