QROPS Myanmar Pension Tax Relief
British expats living in Myanmar or wishing to retire in Myanmar (retire in Burma) can now transfer their pension into a QROPS Myanmar to maximize pension tax relief. British expats living or working in Myanmar (working in Burman) 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.
Any Burmese who have worked in the UK and built up a substantial private pension can also transfer their pensions offshore to a QROPS to avoid UK taxation.
Why live or retire in Myanmar as a British expat?
Nearly 500 Brits live and work in Myanmar or Burma as it once was called when it was a British colony. British rule bought about many enduring social, economic, cultural and administrative changes that completely changed Burma which was a feudal economy. Since Burma’s independence in 1948, the country has been involved in one of the longest running civil wars among the country’s various ethnic groups and remains unresolved to this day.
From 1962 – 2011, the country was under military rule and in the process has become one of the least developed nations in the world. The military junta finally dissolved in 2011 following a general election in 2010 and the subsequent inauguration of Burma’s civilian government. Since then Burma’s president, Thein Sein and his opposition leader, Aung San Suu Kyi who is Chairperson of the National League for Democracy in Burma have worked to open Burma’s doors to the world. Now many foreign companies are looking at opening up their business to Myanmar.
Burma is a resource rich country. However, since the reformations of 1962, the Burmese economy has become one of the least developed in the world. Burma’s GDP is at $51.92 billion and is the poorest country in Asia, their GDP grew expanded 5.50% in 2011. Many Western countries are now trying to lift their economic sanctions and the new reformist government has taken many steps to increase foreign direct investment.
One of the concerns for British expats in Burma is their health care system though, which is one of the worst in the world. The World Health Organization ranked Burma 190th, the worst performing in the world.
Benefits of a Transfer to a QROPS Myanmar
What are the benefits of a QROPS Myanmar Pension Transfer for British expats in Burma?
• Avoids UK income tax
• Avoids UK dividends tax
• Avoids UK capital gains tax (CGT)
• Avoids 55% tax upon death imposed in the UK whilst drawing benefits
• 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 which have strong regulatory financial bodies.
Tax on a QROPS in Myanmar
What would the tax be on a QROPS in Myanmar?
Firstly, your UK pension needs to be transferred to Gibraltar or NZ to be outside of the UK tax net. Each has their own benefits. A move to New Zealand avoids all UK and NZ taxation. Furthermore, any increase in the pension pot after transfer can be taken as an additional lump sum, alongside the 30% available upon transfer. However, the investment needs to be managed by a discretionary portfolio manager which often only allows five strategies based on your risk profile.
A transfer to a QROPS in Gibraltar would be more open. A much wider range of investment instruments can be used such as shares, ETF’s, hedge funds, alternative strategies, etc. However, there would be a flat rate of 2.5% income tax at source.
What would the tax be on the QROPS on remittance to Myanmar?
You can have your pension paid into an offshore bank account in GBP or paid directly into your bank account in Myanmar. A non-resident foreigner is contrarily liable to pay tax only for the income received in Myanmar. This includes worldwide income. The tax rate for a foreigner earning income abroad is 15%, but you need to check with your local tax attorney in Myanmar for up-to-date rules and allowances.
What is a QROPS Myanmar?
A Qualifying Recognized Overseas Pension Scheme (QROPS Myanmar) 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 Myanmar at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Myanmar to avoid further UK taxes down the line. A QROPS Myanmar is an appropriate legal vehicle to avoid UK taxes if you are considering living or retiring abroad.
What is the Name of a QROPS in Myanmar?
Do I need to move my pension to Myanmar?
No. There are no QROPS in Myanmar. You need to transfer your pension can be transferred to Gibraltar or New Zealand where it will be out of the UK tax system.
Do I need to live and retire in Myanmar?
No, as long as you are outside the UK, you will be free from UK taxation and the reporting requirements cease after 10 years. There it will grow sheltered from UK taxes. If you ever return to the UK, your QROPS will revert to typical UK Self Invested Personal Pension (SIPP) Rules and time apportionment relief will apply. You will also have had access to a higher lump sum payment than if you had left it in the UK.
For more enquiries, please to firstname.lastname@example.orgQROPS Myanmar Pension Transfer for British Expats to Avoid Paying Taxes by Richard Malpass