QROPS Sri Lanka. Pension Tax Relief
British expats living in Sri Lanka or wishing to retire in Sri Lanka can now transfer their pension into a QROPS Sri Lanka to maximize pension tax relief. British expats living in Sri Lanka 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. Sri Lankans who have worked in the UK can also transfer their pensions to a QROPS Sri Lanka to avoid paying any UK taxes in the future.
In the 19th and 20th centuries, Sri Lanka became a plantation economy, famous for its production and export of cinnamon, rubber and Ceylon tea, which remains a trademark national export. The development of modern ports under British rule raised the strategic importance of the island as a centre of trade. During World War II, the island hosted important military installations and Allied forces. However, the plantation economy aggravated poverty and economic inequality.
From 1977 the UNP government began incorporating privatisation, deregulation and the promotion of private enterprise. While the production and export of tea, rubber, coffee, sugar and other agricultural commodities remains important, the nation has moved steadily towards an industrialised economy with the development of food processing, textiles, telecommunications and finance. By 1996 plantation crops made up only 20% of export, and further declined to 16.8% in 2005 (compared with 93% in 1970), while textiles and garments have reached 63%.
The GDP grew at an average annual rate of 5.5% during the early 1990s, until a drought and a deteriorating security situation lowered growth to 3.8% in 1996. The economy rebounded in 1997–2000, with average growth of 5.3%
Sri Lanka, with an income per head of US$1,972, still lags behind some of its neighbours including Maldives but is ahead of its giant neighbour India. Its economy grew by an average of 5% during the 1990s during the ‘War for Peace’ era. According to the Sri Lankan central bank statistics, the economy was estimated to have grown by 7% last year, while inflation reached 20%.
Parts of Sri Lanka, particularly the South and East coast, were devastated by the 2004 Asian Tsunami. The economy was briefly buoyed by an influx of foreign aid and tourists, but this was disrupted with the reemergence of the civil war resulting in increased lawlessness in the country and a sharp decline in tourism. But following the end of the 3 decade long separatist war in May 2009 tourism has seen a steep uptick. Also the end of war has ensured the rule of law in the whole of the island.
Why live or retire in Sri Lanka as a British expat?
More than 4,400 Brits live and work in Sri Lanka with more than 650 pensioners. For Brits living in Sri Lanka, you can use your offshore address to move your pension into a QROPS in order to mitigate UK taxes on your pension.
The Benefits of a UK Pension Transfer to a QROPS Sri Lanka
What are the benefits of a QROPS Sri Lanka 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 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 Sri Lanka?
Sri Lanka’s economy is expected to grow at 8.5 percent this year, the highest rate since independence in 1948, fuelled by strong macroeconomic fundamentals and a post-war revival, the central bank said on Tuesday.
The central bank estimated the island nation’s $42 billion economy had grown 8 percent in 2010, from an eight-year low of 3.5 percent in 2009 due to the global financial crisis and the end of a 25-year civil war in the first half of that year.
British expats living in Sri Lanka can now transfer their pension via a QROPS to a safe haven such as Gibraltar in order to avoid most UK taxes.
What taxes do I pay in Sri Lanka as a British expat?
You pay taxes on your worldwide income as a British expat, however you do not pay taxes on any income that wasn’t earned in that tax year, so pensions and a QROPS transfer would be exempt. Your pension would be paid minus a flate rate of 2.5% income tax which is taxed at source in Gibraltar and remitted free of tax into Sri Lanka. Click here for more information on Tax Guide for British Expats Living in Sri Lanka (2006).
What is a QROPS Sri Lanka?
A Qualifying Recognized Overseas Pension Scheme (QROPS Sri Lanka) 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 Sri Lanka at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Sri Lanka to avoid further UK taxes down the line. Moving your pension to Gibraltar is a great estate planning tool.
Can I Move My UK Pension to a QROPS in Sri Lanka
Do I need to move my pension to Sri Lanka?
No. There are no QROPS providers in Sri Lanka. Your pension can be transferred to a secure jurisdiction such as Gibraltar where it will be out of the UK tax system and your pension will grow tax free and have a small income tax deduction of 2.5%, but only when you retire and draw an income.
Do I need to live and retire in Sri Lanka?
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 Pension Plan (SIPP) rules.
For enquiries, please send email to firstname.lastname@example.org
QROPS Sri Lanka article written by QROPS Specialists.QROPS Sri Lanka Pension Transfer for British Expats to Avoid Paying Taxes by Richard Malpass