International Pension Plan

Transferring an International Pension Plan to QNUPS for Tax Planning


Transfer an International Pension Plan to a QNUPS

If you have built up an International Pension Plan (IPP) and want to aim for paying the least tax on your IPP scheme, it is a good idea into looking into the options of transferring your IPP to a Qualifying Non-UK Pension Scheme (QNUPS) in Hong Kong. A QNUPS in Hong Kong does not attract tax on growth or death. Hong Kong QNUPS pension plans attract zero income tax in Hong Kong and also the taxation rights are given to Hong Kong for 26 countries around the world, so even if you live abroad, you may end up paying zero income tax on your pension scheme under current rules.

What is an International Pension Plan?

An International Pension Plan or IPP are often used for the modern global worker who travels a lot, working in many different destinations around the world. They are a good fit for the modern expat as internet connections improve and the international traveler can base themselves from many locations worldwide.

Mercer’s 2012 Benefits Survey for Expatriates and Globally Mobile Employees: a survey of 288 multinational companies covering a total of 119,000 expatriates found that the majority (65%) of multinationals rely on retirement provision that is based in home or host locations for their long-term expatriates, however an International Pension Plan may be a better fit for the global worker, but only 12% of multi-nationals use IPPs.

International Pension Plans offer investment flexibility, currency flexibility and tax efficiency which often aren’t covered adequately by setting up in a home / host country of the multi-national.

International Pension Plan Transfers to Hong Kong

international pension plan

You can transfer International Pension Plans (IPPs) to a Hong Kong Occupational Pension Scheme (HK ORS) for financial planning purposes.

Benefits of Transferring an International Pension Plan to a HK ORS

  • 25% tax-free lump sum at age 55
  • No tax on income, growth or death in Hong Kong
  • No tax on income if you are resident in one of these 26 countries thanks to strong Double Taxation Agreements which give the taxation rights to Hong Kong: Austria, Belgium, Brunei, Canada, China, Czechoslovakia, France, Guernsey, Hungary, Indonesia, Ireland, Jersey, Kuwait, Lichtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, Qatar, South Africa, South Korea, Switzerland, Thailand, UAE and Vietnam
  • Freedom of choice of currency: e.g. GBP, EUR, USD
  • Freedom of choice of investments
  • No limits to contributions & top ups
  • Strong regulation and pension protection in Hong Kong by the Mandatory Provident Fund Schemes Authority (MPFA).
  • Anyone working in any occupation and resident anywhere in the world may be a member of the HK ORS
  • 100% creditor protection: neither a spouse nor a tax authority may seize assets of the Trust; the funds are not available to any creditor, even in event of bankruptcy.
  • No minimum or maximum retirement age and no need to purchase an annuity
  • A HK ORS is FATCA compliant
  • Because of its non-vested status and Hong Kong’s perpetual Trust Laws, the HK ORS can be used for effective multi-generational estate planning purposes
  • An HK ORS also avoids forced heirship should a Member reside in a country that has adopted the practice (i.e. Civil Law countries such as France, Germany, Spain and the Netherlands, and Sharia Law countries such as Saudi Arabia, UAE, Indonesia and Malaysia).
  • An HK ORS can own residential property

Example of International Pension Plan Transfers

  • Transfer an Isle of Man International Pension Plan to Hong Kong, e.g. for resident in the Netherlands
  • Transfer a Guernsey International Pension Plan to Hong Kong, e.g. for resident in France
  • Transfer a Jersey International Pension plan to Hong Kong, e.g. for resident in Germany
  • Transfer a Bermuda International Pension plan to Hong Kong, e.g. for resident in Canada
  • Transfer a Mauritius International Pension plan to Hong Kong, e.g. for resident in the Netherlands
  • Transfer a Dubai International Pension plan to Hong Kong, e.g. for resident in the Switzerland

Residents who may pay no income tax on a Hong Kong pension in their country of residence:

Austria, Belgium, Brunei, Canada, China, Czechoslovakia, France, Guernsey, Hungary, Indonesia, Ireland, Jersey, Kuwait, Lichtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, Qatar, South Africa, South Korea, Switzerland, Thailand, UAE and Vietnam

If you have an International Pension Plan (IPP) and thinking of retiring in one of the countries above, you should look into the option of transferring your pension scheme to Hong Kong.

Why transfer an International Pension Plan to a HK ORS?

An International Pension Plan in the Isle of Man or Guernsey may face an income tax of 20% or even a pension plan in a tax-free destination such as Bermuda or the Cayman Islands won’t protect you from tax in your country of residence in retirement necessarily. An Isle of Man pension plan also often has a 7.5% tax on death. A HK ORS avoids tax on income, growth and death in Hong Kong and it may face no income tax even in your country of residence.

Transferring a UK Pension Plan to a HK ORS

You can also transfer a UK pension plan to Hong Kong, however, these UK tax relieved monies now face a 25% exit tax unless you are also resident in Hong Kong. An IPP transfer to a HK ORS attracts no such exit tax as they are not UK tax relieved pension schemes.

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