QROPS

QROPS Taiwan Pension Transfer for British Expats to Avoid Paying Taxes


QROPS Taiwan. Pension Tax Relief for British Expats in Taiwan

British expats living in Taiwan or wishing to retire in Taiwan can now transfer their pension into a QROPS Taiwan to maximize pension tax relief. British expats living or working in Taiwan can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like New Zealand and will no longer have to pay UK taxes on their pension if they stay offshore. New Zealand has a Double Taxation Agreement with Taiwan, so your pension will be out of the UK tax net and paid out gross in NZ with no tax deducted.

Taiwanese working in the UK or people born in Taiwan who have worked in the UK and now live overseas can also transfer their pension outside of the UK.

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QROPS Taiwan Pension Transfer for UK Expats

Why live or retire in Taiwan as a British expat?

Taiwan’s quick industrialization and rapid growth during the latter half of the 20th century has been called the “Taiwan Economic Miracle”. As Taiwan has developed alongside Singapore, South Korea, and Hong Kong, they are collectively known as the “Four Asian Dragons” or “Four Asian Tigers”.

Japanese rule prior to and during World War II brought changes in the public and private sectors, most notably in the area of public works, which enabled rapid communications and facilitated transport throughout much of the island. The Japanese also improved public education and made it compulsory for all Taiwanese citizens.

When the KMT government fled to Taiwan it brought millions of taels of gold and the foreign currency reserve of mainland China to the island, which, according to the KMT stabilized prices and reduced hyperinflation.[ Perhaps more importantly, as part of its retreat to Taiwan, the KMT brought the intellectual and business elites from mainland China. The KMT government instituted many laws and land reforms that it had never effectively enacted on mainland China. The government also implemented a policy of import-substitution, attempting to produce imported goods domestically. Much of this was made possible through US economic aid, subsidizing the higher cost of domestic production.

More than 2,200 Brits live and work in Taiwan. For the Brits living in Taiwan, you can take advantage of your offshore address to reduce UK tax on your pension as well as protect your wife and children from high UK taxation should anything happen to you through a QROPS Taiwan pension transfer.

What are the Benefits of a QROPS Taiwan?

What are the benefits of a QROPS Taiwan 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 New Zealand which  has its own strong financial regulations which are tax efficient

What is the economy like in Taiwan?

In 1962, Taiwan had a per-capita gross national product (GNP) of $170, placing its economy on a par with those of Zaire and Congo. By 2008 per-capita GNP, adjusted for purchasing power parity (PPP), had risen to $33,000, contributing to a Human Development Index equivalent to that of other developed countries.

In 2010, economic growth topped 10%, the highest rate in almost 30 years; international trade jumped more than 39% to US$526.04 billion; and the job market has turned a rosy picture with most businesses set to recruit. As a result, IMF estimated Taiwan’s 2010 GDP-PPP per capita at over US$34700, surpassing that of Finland, France and Japan all at once.

What is a QROPS Taiwan?

A Qualifying Recognized Overseas Pension Scheme (QROPS Taiwan) 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 holding a QROPS, the reporting requirements to HMRC cease.

If you are living in Taiwan at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Taiwan to avoid further UK taxes down the line. A QROPS Taiwan is an appropriate vehicle to avoid UK taxes if you are considering living or retiring abroad. However, you need to find out your current transfer value first. We can then organize a free pension transfer analysis to see if a QROPS is the right fit for you.

What tax do I pay on my pension as a British expat?

Income tax is levied on income of a resident individual derived from sources within Taiwan. For income tax purposes, the jurisdiction of Taiwan extends to the Island of Taiwan and its subordinate group of islands. Effective from 2010, resident individuals need to pay Alternative Minimum Income Tax on non-Taiwan source income earned.

Tax Guide for Expats Living in Taiwan

As New Zealand has a Double Taxation Agreement with New Zealand, your QROPS pension is paid out gross in NZ with no tax deducted. Then when you remit funds into Taiwan, you would have no tax liability as the funds are coming from outside of Taiwan. You would get a completely tax-free pension.

Are there any other options?

Yes, a QROPS in NZ has limited investment strategies. Normally only 5 or 6 strategies are available depending on your risk profile, e.g. balanced, cautious, aggressive, etc. Normally a more conservative approach is taken.

If you want to take more risk and try to achieve higher returns, we recommend a move to Gibraltar. There is aflat rate income tax of 2.5% on income only, but you are allowed to invest in most investment products including shares, mutual funds, ETF’s, precious metal funds, bond funds, gilts and treasuries from most of the major exchanges from around the world.

Can I Move My UK Pension to a QROPS in Taiwan?

Do I need to move my pension to Taiwan?

No. There are no QROPS in Taiwan. Your pension can be transferred to a secure jurisdiction such as New Zealand or Gibraltar where it will be out of the UK tax system and your pension will be paid gross and grow tax free. Don’t worry, your pension is not parked there. This is simply where the trustees operate from and that is where your pension is treated from a tax perspective. Your pension would actually be invested in a managed portfolio from the Isle of Man.

Do I need to live and retire in Taiwan?

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 would return to UK Self Invested Personal Pension (SIPP) rules, but you would have time apportionment relief, reducing your tax burden.

For enquiries, please send email to info@qropsspecialists.com

Pension tax relief for British expats, QROPS Taiwan article written by QROPS Specialists.

QROPS Taiwan Pension Transfer for British Expats to Avoid Paying Taxes by

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