QROPS Uruguay. Pension Transfers for British Expats in Uruguay

QROPS Uruguay. Now British Expats in Uruguay Can Avoid UK Taxation

British expats in Uruguay or wishing to retire in Uruguay can now transfer their pension into a QROPS Uruguay to maximize pension tax relief. Uruguay and Malta have just signed and ratified a Double Taxation Agreement which means that British expats in Uruguay can now avoid UK taxation through a transfer of their pension pot to Malta. This is how it works – you transfer your pension to Malta which is an EU sovereign state as HMRC allows freedom of movement of labour and capital due to the Schengen agreement.

Your pension is transferred from the UK into a QROPS in Malta. Your pension is held in trust and then you can invest in pretty much anything you want. You can hold mutual funds and shares from all the major exchanges, you can hold bond funds, you can hold gold, silver and even commercial property. So, you could even use your pension to buy a small B&B or hotel for example. However, this is for those with a high risk appetite and normally have extra income outside of their pension.

Prudent advice for British expats in Uruguay is for them to have their pension invested in a mix between bonds, mutual funds (or ETF’s) and usually some funds which have little of no correlation to the stock market.

qrops-uruguay

Carnival in Uruguay

QROPS Uruguay. Why live or retire in Uruguay as a British expat?

Between the years 2007 and 2009 Uruguay was the only country in the Americas which did not technically experience a recession (two consecutive downwards quarters). Unemployment reached a record low of 5.4% in December 2010 before rising to 6.1% in January 2011. Low unemployment has caused a rise in inflationary pressures, although Uruguay’s GDP expanded by 10.4% for the first half of 2010. According to IMF estimates, Uruguay is likely to achieve growth in real GDP of between 8% and 8.5% in 2010, followed by 5% growth in 2011 and 4% in subsequent years. The gross public sector debt contracted in the second quarter of 2010, after five consecutive periods of sustained increase, reached 21.885 billion US dollars, equivalent to 59.5% of the GDP.

QROPS Uruguay. How Many British Expats in Uruguay?

Over 690 Brits live and work in Uruguay. For the Brits living in Uruguay, 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. The landscape features mostly rolling plains and low hill ranges (cuchillas) as well as fertile coastal lowland. There are four river basins or deltas and nine national parks. Uruguay’s climate is relatively mild. High humidity and fog are common. Temperatures range from 12°C to 26°C. Uruguayan Spanish has some modifications due to the considerable number of Italian immigrants. English is common in the business world.

Asado is a popular traditional dish in Uruguay, a kind of barbecued beef. Beef is fundamental to Uruguayan cuisine and the country is one of the world’s top consumers of red meat per capita. Popular foods include beef platters, steak sandwiches (chivito), pastas, barbecued kidneys and sausages. clericó, a mixture of fruit juice and wine is popular. Football and rugby are popular. The Uruguay national football team has won the FIFA World Cup on two occasions.

What are the benefits for a QROPS Uruguay?

What are the benefits of a QROPS for British expats in Uruguay?

• 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 Guernsey or the Isle of Man which is under the protection of the British Crown, but has its own strong financial regulations which are tax efficient

What is a QROPS Uruguay?

A Qualifying Recognized Overseas Pension Scheme (QROPS Uruguay) 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 5 years of living offshore, the reporting requirements to HMRC cease.

If you are living in Uruguay at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS to avoid further UK taxes down the line. A
QROPS Uruguay

is a solid vehicle to avoid UK taxes if you are considering living or retiring abroad.

What is the economy like in Uruguay?

Uruguay experienced a major economic and financial crisis between 1999 and 2002, principally a spillover effect from the economic problems of Argentina. The economy contracted by 11% and unemployment climbed to 21%. Despite the severity of the trade shocks Uruguay’s financial indicators remained more stable than those of its neighbours, a reflection of its solid reputation among investors and its investment-grade sovereign bond rating, one of only two in South America.

In 2005 Uruguay was the first exporter of software in South America. The Frente Amplio government, while continuing payments on Uruguay’s external debt, also undertook an emergency plan to attack the widespread problems of poverty and unemployment. The economy grew at an annual rate of 6.7% during the 2004–2008 period. Uruguay’s exports markets have been diversified in order to reduce dependency on Argentina and Brazil. Poverty was reduced from 33% in 2002 to 21.7% in July 2008, while extreme poverty dropped from 3.3% to 1.7%, respectively.

Between the years 2007 and 2009 Uruguay was the only country in the Americas which did not technically experience a recession (two consecutive downwards quarters). Unemployment reached a record low of 5.4% in December 2010 before rising to 6.1% in January 2011. Low unemployment has caused a rise in inflationary pressures, although Uruguay’s GDP expanded by 10.4% for the first half of 2010. According to IMF estimates, Uruguay is likely to achieve growth in real GDP of between 8% and 8.5% in 2010, followed by 5% growth in 2011 and 4% in subsequent years. The gross public sector debt contracted in the second quarter of 2010, after five consecutive periods of sustained increase, reached 21.885 billion US dollars, equivalent to 59.5% of the GDP.

QROPS Uruguay. Why Move Your Pension Offshore for British Expats in Uruguay

Do I need to move my pension to Uruguay?

No. Your pension can be transferred to a secure jurisdiction such as Malta 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 Uruguay?

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. The tax on your pension will depend on the country you live in and the Double Taxation Agreements which exist.

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

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

QROPS Uruguay. Pension Transfers for British Expats in Uruguay by

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About Richard Malpass

Richard Malpass is a financial advisor from the UK who has been in Thailand for 14 years and helps British expats with fiduciary advice. He works for Credenda Associates in Bangkok. He covers Thailand, Vietnam, Laos, Cambodia and the Asian region by air and covers the rest of the world via post, telephone and internet.

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