Transfer My Pension to Barbados | Moving to Barbados
Are you about transferring a pension to Barbados? Are you moving to Barbados? Are you born in the UK or a British citizen who wants to retire in Barbados? Are you a Bajan or Barbadian moving back to the beautiful island of Barbados to live or retire?
Anyone who has worked in the UK or for a British company can transfer their pension out of the UK abroad thanks to changes in tax regulations in 2006.
There are many reasons why you may want to transfer a pension abroad when moving to Barbados.
Pensions and Benefits for QROPS Resident in Barbados
- Gather all your pension into one place which is easy to manage online and get your pension paid into a local bank in Barbados
- Transfer a frozen or locked pension which you can then access in Barbados
- Move your pension into the local currency or a currency linked to it such as the US Dollar, so exchange rates don’t affect your monthly retirement income in Barbados
- Choice of investments for your pension pot
- Tax Reduction of your UK pension income and eliminate tax on death of your pension income
- Inheritance tax planning in Barbados and reducing or eliminating UK IHT
A QROPS / ROPS is an overseas pension scheme which ticks all these boxes.
If you are moving to Barbados to Bridgetown, the Platinum Coast, Apes Hill Club, Sandy Lane Estate in Holetown, Royal Westmoreland Estate, Clearwater Bay or any other sandy resort or town in Barbados, you may wish to consider a transfer to a Recognised Overseas Pension Scheme (ROPS).
You may want to read this blog for tips on moving to Barbados.
What is the Best QROPS for a Resident in Barbados?
The best QROPS for a resident in Barbados is to transfer a UK pension to Hong Kong.
If you want to transfer a pension to Barbados directly, there is only one ROPS pension plan in Barbados – The DGM Registered Retirement Savings Plan (RRSP). I couldn’t find it when I searched in Google. I am assuming it is a company pension plan or personal pension plan in Barbados.
Most people who move to Barbados, move their pensions to a tax neutral destination for tax reduction purposes.
Most our clients prefer to move to a tax neutral destination such as Hong Kong or Transfer a Pension to NZ. Neither of these destinations tax pension at source.
A New Zealand QROPS is ideal for clients who want a very low risk managed solution with low returns on their pension. The pension is discretionary managed in New Zealand and your pension is held in GBP.
A Hong Kong QROPS is much more flexible and the client can choose currencies as well as the ETF’s, mutual funds, shares, managed accounts or unit trusts of their choice.
You can have a Hong Kong ROPS pension paid directly into a local bank in Barbados such as:
List of Banks in Barbados | Transfer a Pension to Barbados
- Amicorp Bank and Trust Limited
- Amphora Bank & Trust Corporation
- Barbados National Bank
- Caribbean Investment Bank
- CIBC First Caribbean International
- Cidel Bank & Trust Inc
- First Citizens (Barbados) Bank
- Front Street Private Bank (Barbados) Limited
- J&T Bank and Trust
- Occidental Bank (Barbados) Limited
- RBTT Bank Barbados (RNC Royal Bank)
- Royal Bank of Canada in Barbados
- Sandstorm Gold Bank Limited
- Scotia Bank
In fact, a QROPS in HK or NZ can pay directly into any local bank in Barbados or into an offshore bank account, there is no need to transfer a pension to Barbados directly, as HK can be more flexible.
If you ever leave Barbados to retire elsewhere, a HK ROPS is much more flexible as it is tax neutral and sometimes, in some countries, the taxation rights are even given to HK and the tax could be nil.
What is the Tax on a QROPS in Barbados?
Assuming you move your UK pension to a Hong Kong or New Zealand QROPS / ROPS, your tax bill as a pensioner in Barbados will likely be small as long as you draw your pension after the age of 60.
If you are 60 or over, your pension has an allowance of BBD $40,000 p.a. before you start paying tax.
Then, the income tax rate in Barbados is 35% on the rest.
A further spouse allowance is also allowed of BBD $3,000 if the spouse is a dependent, living with you are has no income or an investment income of BBD $800 or less. So, most people will get away with no tax or pay a relatively small amount of tax.
If you between 55 and 60 and want to take an early pension, the annual allowance is BBD $25,000 before you have to pay tax. Then you would have to pay 17.5% on the next BBD $10,000, and 35% on the rest.
There are other tax allowances such as 20% of rent up to a maximum of BBD $3,000.
What is the Currency of Barbados?
The dollar has been the currency of Barbados since 1882. The Barbados dollar replaced the East Caribbean dollar at par in 1973.
Since July 5, 1975, the Barbados dollar has been pegged to the US dollar at 1 USD = 2 BBD $, so the currency is very stable.
You can read in more detail here from the Barbados Tax Authority website.
Other Taxes in Barbados
There are no capital gains taxes in Barbados, nor are there estate taxes, inheritance taxes or gift taxes.
Income tax is the main tax. VAT was introduced in 1997 at 15% which then rose to 17.5% on December 1, 2010 where it stands today. It is imposed on a range of goods and services, replacing the sales tax in Barbados.
What and Where Will My Pension Be Invested?
Your pension can be invested in most regulated investment schemes if you move your pension to Hong Kong.
You can choose from unit trusts, mutual funds, ETF’s, cash, bond funds, gilt funds and shares listed on any major exchange around the world.
This will then be managed on your behalf.
You can speak to a financial adviser about where the funds will be invested and get suggestions or choose them yourself.
Other Retirement Considerations for Moving to Barbados
When moving to Barbados, there are other retirement considerations:
- Visa / work permit / marriage licence / passport issues in Barbados
- Moving house to Barbados
- Moving your pet to Barbados
- Setting up a Barbados bank account or offshore bank account
- Finding the cheapest way of transferring money from GBP to USD or BBD
- Tax reduction and additional pension planning if you are working in Barbados
- Health and life insurance in Barbados
Pension Transfers to Barbados Summary
In summary, when moving to Barbados, we recommend moving your pension to a Recognised Overseas Pension Scheme (ROPS) in Hong Kong and your pension will be paid directly into your bank in Barbados.
We recommend waiting until you are 60 years old which will limit your tax liability on income. There is no tax on death of a ROPS in HK and the entire pension pot will be passed on as a tax-free lump sum at source to your named beneficiaries whom you can choose.
We recommend moving your pension to US Dollars which are pegged to the Barbadian Dollar at a 1 to 2 ratio. This will mean foreign exchange movements will limit any effect on your pension income.
You can choose your investments yourself or send an email to talk to a financial adviser.Transfer a Pension to Barbados - QROPS / ROPS by Richard Malpass