QROPS Laos. Pension Tax Relief
British expats living in Laos or wanting to retire in Laos can now transfer their pension into a QROPS Laos to maximize pension tax relief. UK expats living or working in Laos can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like Gibraltar or New Zealand and will no longer have to pay UK taxes on their pension if they stay offshore.
Why live or retire in Laos as a British expat?
Most British expats who retire in Laos choose to retire in Vientiane, the capital which has most of the facilities in the country. The relatively low cost of living (even a foreigner can survive on a few hundred dollars a month if necessary) is a major attraction, as is the weather and slow way of life.
British expats live and work in tourist-related businesses in Luang Prabang and Vang Vieng too. There are also industries such as hydro-electric power, forestry and mining that have foreign personnel. Pakse in the south is also a sizeable city, with easy access to Thailand and Vietnam. But, Laos has its limitations too with little infrastructure and sparse facilities. Health insurance is highly recommended for British expats in Laos.
Vientiane has a unique ambiance which still reflects its colonial past. French influence is still evident with restored colonial buildings and roads reminiscent of the French governance: routes, rues, avenues and boulevards appear on street signs in both Western script and Lao languages.
If you are living or working in Laos at the moment, you can take advantage of your offshore address to move your pension into a QROPS to avoid UK taxes on your pension. Then you can live or retire anywhere in the world after that outside the UK and still take advantage of this tax free shelter.
What Would the Tax Be on My QROPS in Laos?
A Presidential decree n 2011 now means Lao and foreigners are taxed at the same rate, with the effect that Lao employees will pay less and the foreign employees more than before. The new personal income tax rates applicable to Lao and foreigners who generate income in Lao PDR is based on a progressive rate from 0% to 28%.
Your QROPS will be paid out tax free at source if you transfer to a QROPS in New Zealand. A transfer to a QROPS in Gibraltar would also face a 2.5% income tax in Gibraltar. But, it would avoid all UK taxation.
Benefits of a Pension Transfer to a QROPS Laos
What are the benefits of a QROPS Laos 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 NZ which have their own strong regulatory bodies.
What is the economy like in Laos?
The economy of Laos is rapidly growing, as it began to decentralize control and encouraged private enterprise in 1986. It opened a stock exchange in 2011, and has become an arising regional player in its role as a hydroelectric power supplier to neighbours such as China, Vietnam and Thailand. However, the country remains one of the poorest countries in South-East Asia. A landlocked country, it has inadequate infrastructure and a largely unskilled work force. GDP is at $8.3 Billion for 2011 and grew at a rate of 8% in 2011.
Foreigners cannot own land, houses or motor vehicles in the Lao PDR even if married to Lao citizens. Limited ownership may be possible through a registered foreign company or through a lease.
A move to a QROPS Laos would allow your pension to grow free of UK taxes so that you can maximize your pension(s). This would then be paid gross into an offshore account or straight into a Laos bank account. You can take a 30% lump sum at 55 which you could use to start a company in Laos.
What is a QROPS Laos?
A Qualifying Recognized Overseas Pension Scheme (QROPS Laos) 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 Laos at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Laos to avoid further UK taxes down the line. With UK government debt growing and UK final salary schemes closing, a transfer to a QROPS deserves serious thought.
QROPS Laos. Pension Tax Relief
Do I need to move my pension to Laos?
No. Your pension can be transferred to a secure jurisdiction such as Gibraltar or New Zealand where it will be out of the UK tax system and your pension will be paid gross and grow tax free.
Do I need to live and retire in Laos?
No, you can live anywhere offshore. As long as you are outside the UK, your QROPS will grow free of UK tax. If you ever return to live permanently in the UK, your pension will simply return to UK Self Invested Personal Pension (SIPP) rules.
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Pension tax relief for British expats, QROPS Laos article written by QROPS Specialists.QROPS Laos Pension Transfer for British Expats to Avoid Paying Taxes by Richard Malpass