QROPS Bulgaria | UK Pension Transfers for British Expats Resident in Bulgaria
There are three ROPS in Bulgaria on the UK government’s recognised overseas pension schemes notification list.
|Allianz Bulgaria Voluntary Pension Fund||Bulgaria|
|NN Voluntary Pension Fund||Bulgaria|
|Voluntary Pension Fund ‘CCB – SILA’||Bulgaria|
However, we recommend a QROPS in Malta, where the investment options may be better.
Income on a QROPS in Malta is taxed at source at a flat rate of 15%. Taxation rights are given exclusivley to Malta, there is no tax in Bulgaria.
The UK does not have a Double Taxation Agreement with Bulgaria. After Brexit, a UK pension scheme is taxable in both Bulgaria and the UK.
Transferring a UK Pension to Europe for Residents in Bulgaria
For residents in Europe, we recommend transferring a UK pension scheme to a QROPS in Malta. This is a regulated pension scheme in Malta which is portable anywhere throughout the European Economic Area (EEA).
Moving to Bulgaria | UK Pension Transfers to a European Pension Scheme
If you are moving to Bulgaria, it is advisable to transfer your pension from GBP to EUR to reduce the effects of currency exchange movements affecting your retirement portfolio.
We recommend moving your pension to a QROPS in Malta. Pensions in Malta are regulated by the Malta Financial Services Authority (MFSA).
Your pension monies will be paid out in EUR to a bank of your choice.
Why Transfer to a QROPS in Bulgaria?
Reasons you may want to move your pension fund (also known as a ‘pension pot’) overseas to a QROPS:
- you’re moving to Bulgaria and want to move your pension to a European pension scheme
- you are already resident in Bulgaria and want to move your pension to a European pension scheme
- you want to move your pension out of the UK and into a regulated pension scheme in Europe
- you want to move your pension out of a GBP denominated retirement portfolio in the UK to a EUR denominated portfolio in Europe, so that exchange rate movements do not negatively affect your retirement portfolio
- your UK pension scheme is being closed or wound up
- you want to transfer to a better pension scheme
- you have pensions from more than one employer and want your pensions managed in one place
Tax on a Malta QROPS for Residents in Bulgaria
- No tax on death at source
- No tax on growth
- There is a double taxation agreement between Bulgaria and Malta which gives the taxation rights to Bulgaria
- Income tax is a flat rate of 15%, taxed at source in Malta
- Local taxes in Bulgaria apply when receiving retirement benefits
Tax on Transfer
There is no tax upon transfer.
However, there is an Overseas Tax Charge (OTC) which can apply if you leave the European Economic Area (EEA) within five years of transferring your pension scheme.
The European Economic Area (EEA) is made up of any EU member state including Bulgaria, as well as Liechtenstein, Norway and Iceland.
So, only move your pension scheme to a QROPS in Malta if you intend to stay in Europe for a period of five years or more, otherwise there is a 25% Overseas Tax Charge or “exit tax” which will be applied.
How to Transfer My UK Pension to a QROPS
Please contact a regulated adviser who will provide you with the necessary forms to give to your UK pension scheme administrator to begin the process. Your adviser will guide you through the process and make recommendations based on your circumstances.
What happens to my QROPS in Malta if I return to the UK?
If you ever return to become resident in the UK, you have the ability to transfer your pension back to a UK Self Invested Pension Plan (SIPP) or you can leave your pension in a QROPS in Malta, but it would incur UK income tax.
Please contact us for more information.
Income Tax in Bulgaria
You will be taxed on your worldwide income if you are resident in Bulgaria If you are living in Bulgaria for more than 183 days a year.
Bulgarian residents are taxed on their worldwide income and non-resident individuals are taxed on their Bulgarian-sourced income. Effective since January 1, 2008, a 10% flat tax on personal income has been introduced.
Click here to read the full income tax act of Bulgaria.
Tax on a UK Pension as a Resident in Bulgaria
A UK state pension is taxed in the UK only. The UK and Bulgaria have no social security agreement in place, so a UK state pension will be frozen at its current rate upon first payment, with no increases linked to inflation.
Please contact us for more information.