QROPS Spain | UK pension Transfers to Spain in 2020

QROPS Spain

Transferring a UK Pension to Spain

There are no QROPS in Spain on the UK government’s recognised overseas pension schemes notification list ( 3rd July, 2020).

For residents in Europe, we recommend transferring a UK pension scheme to a QROPS in Malta. This is a regulated pension scheme and retirement benefits can be received anywhere throughout the European Economic Area (EEA) with no tax deducted at source.

Moving to Spain | UK Pension Transfers to a European Pension Scheme

If you are moving to Spain, it is advisable to transfer your pension from a retirement portfolio based in GBP to a retirement portfolio based in EUR.

We recommend transferring UK pensions to a QROPS in Malta. Pensions in Malta are regulated by the Malta Financial Services Authority (MFSA).

Your pension monies can be paid out in EUR to a local bank in Spain.

Why Transfer to a QROPS in Spain?

Reasons you may want to move your pension fund (also known as a ‘pension pot’) overseas to a QROPS:

  • 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 to bring your pension together under one platform which is more easily managed
  • you’re moving to Spain and want to move your UK pension to a pension scheme in Europe
  • you are already resident in Spain and want to move your UK pension to a pension scheme in Europe
  • you want to move your pension out of the UK and into a regulated pension scheme in Malta
  • you want to move your pension out of a UK retirement portfolio in GBP to a European retirement portfolio in EUR

Tax on a Malta QROPS for Residents in Spain

  • No tax on death at source
  • No tax on growth
  • There is a double taxation agreement between Spain and Malta
  • Local taxes in Spain apply when receiving retirement benefits

Tax on Transfer

There is no tax on transfer under current rules. 

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 Spain, 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 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 Personal Pension (SIPP) or you can leave your pension in a QROPS in Malta, however it would incur UK tax.

Please contact us for more information.

Which UK Pensions Are Taxed in Spain?

If you are tax resident in Spain, your UK state pension and any occupational pension income will be taxable only in Spain and not in the UK, under the terms of the UK-Spain Double Taxation Treaty. 

UK Government service funded pensions (for example, civil service, local government schemes, fire service, police and most teachers) remain liable only to UK tax and are not taxable in Spain.

Funded public sector schemes can be transferred to a QROPS.

Unfunded public sector schemes (e.g. NHS, civil service, teachers and armed forces) cannot be transferred to a QROPS.  

Income Tax in Spain (2019)

Savings taxable income is taxed at the following rates:

  • 19% for the first EUR 6,000 of taxable income.
  • 21% for the following EUR 6,000 to EUR 50,000 of taxable income.
  • 23% for any amounts over EUR 50,000.

For general taxable income, progressive tax rates are applied (which are the sum of the applicable rate approved by the state and the applicable rate approved by each autonomous community of Spain in their progressive tax rate scales). Tax liability may therefore differ from one autonomous community to another.

The following tables show the tax scale for withholdings approved by the state. This scale can be used as a guideline of the progressive tax rates applicable for the general taxable base. For the reasons stated above, the scale applicable in the corresponding autonomous community of Spain should always be consulted to calculate the total progressive tax rate.

Tax scale for withholdings applicable in 2019:

i) General Income:

 

Rate Bands

Income Tax Rate in 2019 

 

 
 

EUR

                                       %    

0 – 12,450

19%

 

 

12,450 – 20,200

24%

 

 

20,200 – 35,200

30%

   

35,200 – 60,000

37%

   

60,000+

45%

   

These rates apply to general taxable income. Different rates may apply depending on the region (“Comunidad Autónoma”) where the taxpayer is resident and will be applied on the taxpayer’s annual income tax return.

Please contact us for more information concerning QROPS.

UK Pension Transfers to France | QROPS France

UK Pension Transfers to France

For British expats who want to retire abroad in Europe for five years or more, it may be worth considering moving your UK pension scheme into a QROPS based in Europe.

Transferring a UK Pension to Europe for Residents in France

For residents in Europe, we recommend transferring a UK pension scheme to a QROPS in Malta. This is a regulated pension scheme and retirement benefits can be received anywhere throughout the European Economic Area (EEA) with no tax deducted at source.

Moving to France | UK Pension Transfers to a European Pension Scheme

If you are moving to France, it is advisable to transfer your pension from a retirement portfolio based in GBP to a retirement portfolio based in EUR.

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 France?

Reasons you may want to move your pension fund (also known as a ‘pension pot’) overseas to a QROPS:

  • you’re moving to France and want to move your pension to a European pension scheme
  • you are already resident in France 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 France

  • No tax on death at source
  • No tax on growth
  • There is a double taxation agreement between France and Malta
  • Local taxes in France apply when receiving retirement benefits

Tax on Transfer

There is no tax upon transfer under current rules.

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 France, 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.

QROPS Bulgaria | UK Pension Transfers for British Expats in Bulgaria

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.

living in bulgaria

  Pic: Varna Beach on the Black Sea in Bulgaria

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.

QROPS Portugal | Can I Transfer a UK Pension to Portugal?

QROPS Portugal | UK Pension Transfers To QROPS for British Expats living in Portugal

British expats resident in Portugal and Portguese employees who have worked in the UK can transfer their UK pension schemes to a regulated pension scheme in Malta to a pension scheme based in euros.

Transferring a UK Pension to Portugal

For residents in Europe, we recommend transferring a UK pension scheme to a QROPS in Malta. This is a regulated pension scheme and retirement benefits can be received anywhere throughout the European Economic Area (EEA) with no tax deducted at source.

Moving to Portugal | UK Pension Transfers to a European Pension Scheme

If you are moving to Portugal, it is advisable to transfer your pension from a retirement portfolio based in GBP to a retirement portfolio based in EUR.

We recommend 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 local bank in Portugal.

Why Transfer to a QROPS in Malta as a Resident in Portugal?

Reasons you may want to move your pension fund (also known as a ‘pension pot’) overseas to a QROPS:

  • 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 to bring your pension together under one platform which is more easily managed
  • you’re moving to Portugal and want to move your UK pension to a pension scheme in Europe
  • you are already resident in Portugal and want to move your UK pension to a pension scheme in Europe
  • you want to move your pension out of the UK and into a regulated pension scheme in Malta
  • you want to move your pension out of a UK retirement portfolio in GBP to a European retirement portfolio in EUR

Tax on a Malta QROPS for Residents in Portugal

  • No tax on death at source
  • No tax on growth
  • There is a double taxation agreement between Spain and Malta
  • Local taxes in Spain apply when receiving retirement benefits

Tax on Transfer

There is no tax upon transfer under current rules.

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 Spain, 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 send 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.

Please contact us for more information.

Non-Habitual Residents in Portugal

Brits with Non-Habitual Residency (NHR) will receive a flat rate of tax of 10% on their foreign pension income for those who acquire Portuguese residence after March 31, 2020. The rate is 0% if you attained NHR status before this date.

This applies to all non-Portuguese pension income and withdrawals, including lump sums.

The Non-Habitual Residence Scheme

The Non-Habitual Residents (NHR) scheme was set up to attract foreigners to come and live in Portugal.

Income tax is a flat rate of 20% under certain conditions if you are working in Portugal under the NHR scheme* (see below). The tax on a QROPS is a flat rate 10%.

Advantages of Moving to Portugal

Portugal is a popular retirement destination for British expats looking to retire abroad due to its climate, people and lifestyle.

There are also other tax advantages if you apply for the Non-Habitual Resident Scheme.

NHR Scheme Tax Guide

• There is a special tax rate of 20% applicable to employment and self-employment income derived from a “high value-added activities” exercised in Portuguese territory, as per a list published by the Portuguese tax authorities;

• employment income from a foreign source will be exempt from taxation, if such income is taxed in the State of source;

• tax exemption (with progression) for foreign-source income (professional income, pension, rental income, capital gains, interest, dividends, as well as other investment income), provided certain conditions are met. In most cases, capital gains on the sale of securities are taxable at a flat rate of 28%;

• no specific inheritance or gift tax; full tax exemption for gifts on inheritance to spouse, descendent or ascendants; Inheritance or gift to other individuals will be either not taxable or subject to a flat 10% Stamp Tax rate;

• no wealth tax and free remittance of funds either in Portugal or abroad

Applying for EU Residency in Portugal

Both EU/EFTA and non-EU residents are eligible to apply for permanent residence in Portugal after five years. The process is more straightforward for EU/EFTA citizens; you can read more here regarding Portuguese immigration policy for EU nationals and family.

qrops portugal

Many British workers who move to work in Portugal with their companies decide to retire in Portugal. In such circumstances, it may be prudent to look into moving your pension to Europe.

Income Tax Rates in Portugal (2019)

You pay tax on your worldwide income if you spend more than 183 days per year in Portugal. Non-residents pay a flat rate 25% on income. 

British expats living in Portugal over 183 days per year pay:-

Income Progressive Tax Rate (%)
0 – 7,091.00 14.5
7,091 – 10,700 23.0
10,700 – 20,261 28.5
20,261 – 25,000 35
25,000 – 36,856 37
36,856 – 80,640 45
80,640+ 48

You can find the latest Portuguese income tax rates from the Governo de Portugal’s web site.

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 Personal Pension (SIPP) or you can leave your pension in a QROPS in Malta, but it would incur UK tax.

For more information, please send us an email.

QROPS Switzerland | Transferring a UK Pension to Switzerland

QROPS Switzerland | UK Pension Transfers to Switzerland

There is now a 25% Overseas Transfer Tax (OTC) if you transfer a pension to a QROPS as a resident in Switzerland. There is no tax if you move to anywhere in the European Economic Area.

Most QROPS in Switzerland are now closed to new members and no longer on the regulated overseas pension schemes notifications list.

QROPS in Switzerland on the regulated overseas pension schemes notifications list:

  • CERN Pension Fund
  • Independent Freizuegigkeitsstiftung

qrops switzerland

Please contact us if you are moving to Europe and want more information concerning a QROPS in Malta.

UK Pension Transfers to Europe

UK pensions can be transferred to a QROPS in Malta.

Malta is a European country with over 70 Double Taxation Agreements including all the European Economic Area (EEA) countries. A QROPS in Malta is regulated by the Malta Financial Services Authority.

Both private and some public pension schemes can be transferred to Europe.

Unfunded public pension schemes such as the NHS, police, armed forces and civil service pensions cannot be transferred to a QROPS in Europe.

List of European Economic Area Countries

A QROPS in Malta has a Double Taxation Agreement in place with the following countries:

  • Austria
  • Belgium
  • Bulgaria
  • Croatia
  • Republic of Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Finland France
  • Germany
  • Greece
  • Hungary
  • Ireland
  • Italy
  • Latvia
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Poland
  • Portugal
  • Romania
  • Slovakia
  • Slovenia
  • Spain
  • Sweden

Tax will be deducted at source in Malta and local taxes will apply.

Can a State Pension Be Transferred to a QROPS?

State pensions cannot be transferred to QROPS, but state pensions can be paid into your local bank account in Europe. Please click below to claim your pension abroad and get a pension forecast.

https://www.gov.uk/state-pension-if-you-retire-abroad

https://www.gov.uk/state-pension-if-you-retire-abroad

Can I Get My State Pension Paid into the UK and in Europe?

No, you must choose which country you want your pension to be paid in. You cannot be paid in one country for part of the year and a different country for the rest of the year.

Your UK State Pension can be paid into:

  • a bank in the country in Europe where you are currently living or
  • a bank or building society in the UK

You can use:

  • an account in your name
  • a joint account
  • someone else’s account – if you have their permission and keep to the terms and conditions of the account

You’ll need the international bank account number (IBAN) and bank identification code (BIC) numbers of your bank account in Europe.

You’ll be paid in EUR – the amount you get may change due to exchange rates which will fluctuate over time.

Will I Still Get My UK State Pension Paid Abroad after Brexit?

Yes. Retirees will still be entitled to the state pension they have built up, but it may be that those pension payments are frozen. Under current rules, if you live in the European Economic Area, your pension rises with inflation under the “triple lock” rule.

The arrangements to apply in future have been part of the negotiations under Article 50 on the UK’s withdrawal from the EU. A joint report on progress published on 8 December 2017 said that, with the caveat that “nothing is agreed until everything is agreed”, the Withdrawal Agreement would include a commitment to social security co-ordination.

.. As a result, UK state pension payouts should not be affected in any material way by Brexit. You can read the full parliamentary paper here.

The Financial Times includes a statement from Baroness Buscombe, undersecretary of state with the department for work and pensions , that UK State pensions will increase in line with inflation in 2019/20 despite a “no deal” Brexit.

It is still unclear whether exiting the EU will mean the end of the triple lock arrangement for state pensions in the long run, as the UK would need to negotiate reciprocal arrangements with individual EU nations.

Will My Company Pension Scheme Be Affected by Brexit?

Defined benefit, occupational or final salary pension schemes are based on an arrangement between an employer and employee. As a result, they should not be affected in any material way by Brexit. However, if you move abroad to Europe, you may wish to consider moving your pension to a regulated European pension scheme.

Please read the following article about moving a final salary pension scheme abroad.

Will My UK Pension Scheme Be Affected by Brexit?

Huw Evans, director general of the Association of British Insurers, raised serious concerns about UK pension payments if there is a hard-Brexit.

He said several EU nations currently do not have legal frameworks in place to deal with UK pension payments in a post-Brexit world.

He said the Bank of England has estimated that there are about 38 million pension and life policyholders who will be affected by this issue.

“This is highly material, and there is the related issue that in future, if UK citizens retire to an EU country and they have an insurance-based pension which is paid to them in the domestic bank account of the current country in which they reside, that may also be deemed illegal if there is not an arrangement found for this route,” Evans said.

A ‘No Deal’ Brexit could mean that private UK companies have problems paying out, for example, an annuity to a UK citizen in the EU. There could be cost issues and the question of exchange rates for companies transferring money. The Association of British Insurers (ABI) states that this issue can be solved by a ‘cooperation between EU and UK regulators’, but this issue has not been resolved yet. If this were to happen, expats could continue to draw out their private pensions without issue.  

UK Pension Transfers to a European QROPS

If you are moving to Europe and intend to retire permanently in Europe or abroad, you may wish to consider moving your pension out of a regulated penson scheme in the UK and into a regulated pension scheme in Europe.

You can move your pension out of a pension set up in pounds sterling and into a pension scheme set up in euros. Between the summer of 2015 and 2018, the pound lost over 20% in value against the euro.

For more information, please contact us.

The Top 100 British Expat Destinations

Top 100 Most Popular Expat Destinations

Over 5 million Brits live abroad or about 1 in 10 of the entire British population. Many are posted abroad by their companies. Most are looking for sunnier climates.

Outside of the United Kingdom and its Overseas Territories, the largest proportions of people of self-identified ethnic British descent in the world are found in New Zealand (59%), Australia (46%) and Canada (31%), followed by a considerably smaller minority in the United States (12%) and parts of the Caribbean.

The estimate of Bristish Americans is a serious undercount as almost 50 million Americans (25% of the population in the 1980 US census) claimed English or part-English ancestry; 20-35 million have Scots, Scots-Irish and Welsh ancestry.[ The British ancestry is most often hidden within the category ‘American.’

Hong Kong has the highest proportion of British citizens outside of the United Kingdom and its Overseas Territories, with 47% of Hong Kong residents holding a British National (Overseas) citizenship or a British citizenship.

Top 100 Destinations for Brits Abroad

In 2006, the Institute for Public Policy Research (IPPR), a British think tank, published a report on the British diaspora, entitled Brits Abroad. The following table lists the estimated number of British people (defined as people who are British Subjects, such as British citizenBritish National Overseas or British Overseas Citizen) living overseas in countries with more than 100 British people, according to the IPPR’s report .

british expats map

Australia was the clear winner with over 1 million Brits choosing Australia as its home.

In Europe, Spain is the clear winner with three quarters of a million people claiming Spain as their new home.

In North America, it is split evenly, with over 600,00 Brits living in Canada & another 670,000 in the USA.

In Africa, over 200,000 Brits call South Africa home whilst over 55,000 Brits live in Dubai in the Middle East.

Pakistan, Singapore, Thailand & China are fighting for the top spot for British expats living in Asia.

Barbados & Jamaica are the two favourite spots in the Caribbean, followed by Trinidad & Tobago.

South America is not a well travelled spot for Brits with only 11,000 Brits living in Brazil. Argentina & Venezuela take the 2nd & 3rd spots.

Rank Country Number of British residents, 2006 Region(s)
1 Australia 1,300,000 Asia Pacific
2 Spain 761,000 Europe
3 United States 678,000 North America
4 Canada 603,000 North America
5 Ireland 291,000 Europe
6 New Zealand 215,000 Asia Pacific
7 South Africa 212,000 Africa
8 France 200,000 Europe
9 Germany 115,000 Europe
10 Portugal 60,000 Europe
11 Cyprus 59,000 Mid East
12 UAE 55,000 Mid East
13 Pakistan 47,000 Asia
14 Singapore 45,000 Asia Pacific
15 Switzerland 45,000 Europe
16 Israel 44,000 Mid East
17 Netherlands 44,000 Europe
18 Thailand 41,000 Asia Pacific
19 China (including Hong Kong) 36,000note Asia Pacific
20 Turkey 34,000 Eur/Mid East
21 India 32,000 Asia
22 Kenya 29,000 Africa
23 Belgium 28,000 Europe
24 Barbados 27,000 Caribbean
25 Saudi Arabia 26,000 Mid East
26 Italy 26,000 Europe
27 Jamaica 25,000 Caribbean
28 Japan 23,000 Asia Pacific
29 Sweden 18,000 Europe
30 Greece 18,000 Europe
31 Nigeria 16,000 Africa
32 Norway 15,000 Europe
33 Egypt 14,000 Africa
34 Philippines 14,000 Asia Pacific
35 Malaysia 13,000 Asia Pacific
36 Trinidad and Tobago 11,000 Caribbean
37 Brazil 11,000 South America
38 Bahrain 11,000 Mid East
39 Gaza & West Bank 11,000 Mid East
40 Indonesia 11,000 Asia Pacific
41 Denmark 11,000 Europe
42 Bangladesh 9,200 Asia
43 Malta 9,000 Europe
44 Mexico 8,500 North America
45 Austria 8,500 Europe
46 Argentina 8,300 South America
47 Qatar 8,100 Mid East
48 Oman 7,800 Mid East
49 Malawi 7,400 Africa
50 Venezuela 7,200 South America
51 Jordan 7,200 Mid East
52 Kuwait 7,100 Mid East
53 Czech Republic 6,800 Europe
54 Brunei 6,400 Asia Pacific
55 Macao 6,300 Asia Pacific
56 Zimbabwe 6,100 Africa
57 Russia 6,100 Europe
58 Ghana 5,900 Africa
59 Zambia 5,800 Africa
60 Poland 5,600 Europe
61 Tanzania 5,500 Africa
62 Luxembourg 5,500 Europe
63 Chile 5,200 South America
64 Hungary 5,200 Europe
65 Botswana 5,000 Africa
66 Costa Rica 4,800 North America
67 Peru 4,600 South America
68 Romania 4,500 Europe
69 Sri Lanka 4,400 Asia
70 Bahamas 4,100 Caribbean
71 Vietnam 3,800 Asia Pacific
72 Colombia 3,600 South America
73 Libya 3,600 Africa
74 Gibraltar 3,600 Europe
75 Yemen 3,400 Mid East
76 South Korea 3,400 Asia Pacific
77 Iran 2,900 Mid East
78 Antigua/Barbuda 2,800 Caribbean
79 Finland 2,800 Europe
80 Nepal 2,700 Asia
81 Grenada 2,500 Caribbean
82 Uganda 2,500 Africa
83 Ecuador 2,400 South America
84 Morocco 2,400 Africa
85 Azerbaijan 2,400 Europe
86 Swaziland 2,300 Africa
87 Guyana 2,200 South America
88 Lebanon 2,200 Mid East
89 Syria 2,200 Mid East
90 Belize 2,000 North America
91 Sierra Leone 2,000 Africa
92 Iraq 2,000 Mid East
93 Guatemala 1,900 North America
94 Dominica 1,800 Caribbean
95 Netherlands Antilles 1,800 Caribbean
96 Seychelles 1,800 Africa
97 Namibia 1,700 Africa
98 Mauritania 1,600 Africa
99 Serbia-Montenegro 1,600 Europe
100 St Lucia 1,500 Caribbean

What is a Typical British Expat?

Internations did a survey on British expats and here is what they found:

The average British expat doesn’t shy away from new beginnings: from length of stay to friendships with local residents and ease in feeling at home, results are generally far above average.

  • 51% are not likely to return to the UK
  • British expats are on average 53 years old
  • 3% of British expats are independently wealthy
  • A quarter of British expats are retirees
  • 24% are mostly friends with local residents
  • 72% are in a relationship
  • 43% earn more abroad than at home
  • 8 out of 10 Brits are happier living abroad

Brits Love Living Abroad

Perhaps most impressive is that 37% of British expats from the have been living abroad in their host country for more than ten years — more than ten percentage points above the global average of 24%.

Brits are also more than ten percentage points more likely to feel at home in their new country: three-quarters say they feel at home, compared to only 64% of all survey respondents.

Since so many British expats report feeling at home, it seems hardly surprising that exactly half plan to stay forever (vs. 32% globally). Likewise, more than half (51%) say that it’s not likely they will ever return home to the UK. The British expat is also more satisfied than the average expat: nearly one in five (19%) even say that moving for a better quality of life was a main priority (vs. only 10% globally).

British Expats in Europe

Top 20 Destinations for British Expats in Europe

Spain takes the top spot followed by Ireland, France, Germany & Portugal.

Rank Country Number of British residents, 2006 Region(s)
2 Spain 761,000 Europe
5 Ireland 291,000 Europe
8 France 200,000 Europe
9 Germany 115,000 Europe
10 Portugal 60,000 Europe
15 Switzerland 45,000 Europe
17 Netherlands 44,000 Europe
23 Belgium 28,000 Europe
26 Italy 26,000 Europe
29 Sweden 18,000 Europe
30 Greece 18,000 Europe
32 Norway 15,000 Europe
41 Denmark 11,000 Europe
43 Malta 9,000 Europe
45 Austria 8,500 Europe
53 Czech Republic 6,800 Europe
57 Russia 6,100 Europe
60 Poland 5,600 Europe
62 Luxembourg 5,500 Europe
64 Hungary 5,200 Europe
68 Romania 4,500 Europe
74 Gibraltar 3,600 Europe
79 Finland 2,800 Europe
85 Azerbaijan 2,400 Europe
99 Serbia-Montenegro 1,600 Europe
113 Macedonia 950 Europe
115 Iceland 940 Europe
118 Ukraine 900 Europe
119 Croatia 890 Europe
121 Bulgaria 800 Europe
123 Estonia 750 Europe
125 Slovakia 740 Europe
130 Bosnia-Herzegovina 540 Europe
137 Latvia 370 Europe
141 Slovenia 330 Europe
142 Monaco 320 Europe
145 Lithuania 290 Europe
149 Andorra 210 Europe
151 Georgia 200 Europe
153 Albania 190 Europe

How Many British Expats Live in the EU?

1.3 million people born in the UK live in other EU countries, according to 2017 estimates from the United Nations (UN). Around 900,000 UK citizens were long-term residents in other EU countries in 2010 and 2011, according to census data across the EU collated by the Office for National Statistics (ONS).

In 2013/14 the UK spent £1.4 billion on state pension payments to recipients living elsewhere in the European Union.

Concerns for British expats living in EU countries

For them, healthcare, pensions, work permit, and free travel in the EU will probably be affected. These issues are currently regulated by EU laws, all based on the fact that EU citizens have the right to reside in any EU country of their choice. Once British expats cease to be EU citizens, their rights will need to be renegotiated.

Currently, EU partners charge the NHS for the costs of treating British pensioners. In 2013/14 the UK paid £580 million to other EEA countries for the treatment of British pensioners resident in the EEA while it received just £12 million from other EEA countries in the same year for the treatment of EEA pensioners in the UK

What Do Europeans Think of Britain Leaving the EU

In the picture below, you can see Europeans’ opinions of whether Britain should leave the EU… it is a resounding no, with the notable exception being the French.

brexit eu opinion

What will happen to British expats living in EU countries?

Thanks to the Vienna Convention of 1969, which states that the termination of a treaty “does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination”, British expats already residing in other EU member countries will probably retain their right to do so.

British people who want to move to, work or retire in EU countries after Brexit actually happens will probably also be able to do so. However, as they will already be third-country citizens, administrative procedures for this might become more complicated for them than it is now. For example, obtaining visas will become a lot more troublesome.

The same might be true for EU citizens currently living in, or planning to move to the UK.

Financial Planning for British Expats

Whether you are trying to move to Europe before Brexit or moving elsewhere in the wold, you will need help with financial planning.

Some of the things you will need to think about:

  • Setting up a new bank account in your new country
  • Transferring money abroad and getting the best exchange rates
  • Selling your house in the UK or renting it out
  • Keeping your state pension up-to-date with direct debit
  • Click here to find out about paying National Insurance Contributions (NICs) whilst abroad
  • Moving your pension out of a regulated UK pension scheme and into a regulated pension scheme in Europe
  • Moving your pensions and other assets from pounds sterling to euros
  • Getting expat health insurance, as many policies do not cover permanent residency overseas
  • Getting expat life insurance
  • Reorganising your investments into a more tax efficient environment
  • Protecting your wealth with trusts or insurance wrappers

Please contact us if you want more information.

Transferring a Final Salary Pension Scheme to a QROPS

Transferring a Defined Benefit Pension Scheme to a QROPS

The Financial Conduct Authority (FCA) have written a report concerning transfers of final salary pension schemes abroad.

In the 58 page report, PS 18/20,  regarding safeguarded benefits on 4th October, 2018, Christopher Woolard, FCA’s Executive Director of Strategy and Competition said:

“These new rules will mean advisers have greater certainty and confidence in what we expect when they offer pension transfer advice.

“We expect our interventions to improve the quality of advice which will help to reduce the number of complaints against advisory firms. We will measure consumer outcomes through our supervisory work.”

“Any changes to our rules on contingent charging could have implications for the supply of advice. Because of the significance of this issue to all stakeholders in the market, we will carry out further analysis and consult on new interventions if appropriate in the first half of next year.”

HMRC are discouraging final salary defined benefit pension schemes from being transferred to defined contribution pension schemes, even if members are moving overseas and it is written all over the report. This is because final salary pension schemes give clients a guaranteed income for life which usually rises in line with inflation along with other safeguarded benefits.

Although, there can be reasons for transferring your final salary pension scheme abroad including ill health, inheritance planning and currency planning issues.

Further Highlights in the Report

New pension guidance in report PS 18/20 following on from PS 18/7. Here are some highlights.

“Defined Benefit (DB) pensions, and other safeguarded benefits involving guaranteed income, provide valuable benefits. Most consumers will be best advised to keep them. There is potential for significant consumer harm if consumers who are considering giving up these benefits are given unsuitable advice. ”

“Since the introduction of pension freedoms in 2015, there has been a considerable increase in the demand for pension transfer advice and in the volume of actual transfers”

“While most consumers will be best advised to keep their DB pensions and other safeguarded benefits, we recognise that the pensions environment has changed. This is particularly the case since the pension freedoms gave consumers with Defined Contribution (DC) pensions more options to access their pension savings. As a result, there has been an increased demand for pension transfer advice, as advice is mandatory under government legislation for potential transfers valued at more than £30,000.”

“Over 6 million people are eligible to transfer deferred benefits out of DB schemes. Transfer values have been at record high levels since 2016, with employee benefit consultancies reporting the average size of transfer at over £250,000. In the Cost Benefit Analysis (CBA) in CP18/7, we estimated that 100,000 members are transferring out of their DB scheme each year”

“We expect fewer complaints against advisory firms and fewer customers becoming the victims of pension scams. We have continued our work on preventing pension scams, including scams involving pension transfer advice, and we recently updated our ScamSmart website pages”.

Transferring a Defined Contribution Scheme Abroad

For defined contribution scheme transfers, please contact us for more information.

QROPS NZ | UK Pension Transfers to New Zealand | 2018 Rules

QROPS NZ Explained

QROPS NZ – If you are moving to New Zealand or retiring to New Zealand, you may want to look into transferring your pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) in New Zealand.

New HMRC rules for 2017/18 mean that you can transfer a UK pension to New Zealand and access your entire pension pot from the age of 55.  However, under the new rules, you must remain tax resident in New Zealand for five years following the transfer or move your pension scheme to a different QROPS in the new country you are moving to in order to avoid a retrospective 25% exit tax from HMRC.

A QROPS in New Zealand faces zero income tax at retirement age, no tax on growth and no tax on death. The whole pension pot can be transferred to your heirs tax-free upon death.

If you have an occupational pension scheme, final salary scheme, defined benefit (DB) pension scheme, a SIPP, SSAS or defined contribution (DC) pension scheme in the UK and you are leaving the UK to live and work in New Zealand, you are entitled to transfer your existing UK pensions to a QROPS in NZ.

However, please note, that if you transfer your pension to New Zealand, you need to live there as a resident for five years after transfer otherwise you could face a retrospective 25% exit tax charge. After five years, you can go and live elsewhere without the exit charge being imposed.

A QROPS NZ is a tax neutral jurisdiction where you can move your UK pension scheme to get it out of the UK tax net. There will no longer be any tax in the UK as long as you remain tax resident in New Zealand for five years and there is no tax in New Zealand when you draw your retirement benefits in New Zealand. If you retire elsewhere in the world within five years, there would be a 25% exit charge imposed after the transfer unless you can move your pension to another QROPS in the country you move to.

For example, you could move a New Zealand QROPS to a European Malta QROPS if you then decided to move to live in Europe within five years.

QROPS NZ Rules 2017/2018

  • Full pension flexibility allowed, similar to the UK
  • You can access your pension in one go as a tax-free lump sum at age 55 or you can take a series of lump sums or take an annual income from your pension pot
  • The smart move is to keep your pension wrapped in a QROPS as long as possible as it avoids all tax on death. As soon as you cash your pension in, it forms part of your estate and any monies or assets could be subject to 40% UK Inheritance Tax (IHT)
  • There are also exit fees if you decide to cash your pension in early
  • We recommend using the QROPS as an effective inheritance planning and pension tool. We recommend drawing down your pension income when you have exhausted all other income options
  • If you transfer your pension to a NZ QROPS and then move to another country, there may be a 25% exit tax within five years of your pension transfer, unless you move your QROPS to the country you live in, for example if you move your QROPS NZ to a QROPS in Malta if you decide to relocate to Europe

Our NZ QROPS Provider Solution for 2018/19

NZ QROPS Fund Management
Asset Class Name of Fund Type of Investment Management Underlying Investment Manager
Australian Equities Vanguard Australian Shares Index Fund  Index tracker  Vanguard
International Equities Vanguard International Shares Index Fund (Hedged) AUD Class  Index tracker  Vanguard
Vanguard International Small Companies Index Fund (Hedged)
Vanguard Emerging Markets Shares Index Fund
Vanguard FTSE 100 UCITS ETF
Vanguard FTSE 250 UCITS ETF
Vanguard S&P 500 UCITS ETF
Vanguard FTSE All World UCITS ETF
 Listed Property Vanguard Australian Property Securities Index Fund Index Tracker  Vanguard
Vanguard International Property Securities Index Fund (Hedged)  Vanguard
SPDR Morningstar Multi-Asset Global Infrastructure UCITS ETF State Street
International Fixed Interest Vanguard Australian Fixed Interest Fund Index Tracker  Vanguard
Vanguard International Fixed Interest Index Fund (Hedged)  Vanguard
Vanguard International Credit Securities Index Fund (Hedged)  Vanguard
Vanguard UK GILT UCITS ETF  Vanguard
Vanguard USD Corporate Bond UCITS ETF  Vanguard
Vanguard Eurozone Government Bond UCITS ET  Vanguard
Vanguard USD Treasury Bond UCITS ETF  Vanguard
iShares Core GBP Corporate Bond UCITS ET  BlackRock
 Cash ANZ Wholesale Cash Fund  Active Management  ANZ

QROPS NZ Examples Under the New Rules

  • You move your UK pension to a QROPS in New Zealand and after three years you move to Australia. If you move your pension to a QROPS in Australia there is no tax charge. Although, there are pension transfer limits in Australia which may make that difficult. Usually though, you can draw a QROPS in NZ as an Australian resident without paying Australian taxes due to the Trans-Tasmanian tax agreement.
  • You move your UK pension to Australia and after six years you move to another country. As long as you don’t move back to the UK, your pension would not be taxed in the UK or New Zealand. Although you may pay some tax in your new country of residence.
  • You move your UK pension to New Zealand and after one year, you move to Portugal in Europe. If you don’t transfer your pension out of the QROPS NZ, you would face a 25% exit tax. You could however, transfer to a European QROPS in Malta to avoid the 25% exit tax.
  • As you can see, new HMRC rules have made transfers to QROPS a lot more complex. Also, it is difficult to know what the government will do after Brexit.

Why Transfer a UK Pension to a QROPS NZ?

  • You live in New Zealand and wish to retire in New Zealand; you should be resident in New Zealand for five years after the pension transfer to avoid the 25% exit tax
  • You will later move to Australia after five years  of living in New Zealand and want to take advantage of the Trans-Tasman Retirement Portability Agreement which allows your UK pension to be transferred to NZ and your retirement income is paid out tax-free into your Australian bank account, also avoiding taxes on growth and death
  • You want to transfer your pension out of the UK tax net before Brexit to make sure your QROPS is locked in under current rules
  • British expats, Irish expats, Dutch expats, Kiwis who have a substantial pension in the UK and any holder of a DC or DB pension scheme in the UK can transfer to a QROPS in New Zealand

British expats in NZ and Kiwis who have worked in the UK can both transfer their pensions to a QROPS NZ to get out of the UK tax net and have the choice of a managed pension account in GBP.

In fact, British expats or Kiwis who live anywhere abroad can take advantage of a QROPS NZ. Kiwis working in the UK can also transfer their existing UK pensions into a QROPS to avoid the 45% tax upon death after age 75 as well as UK income taxes of up to 45%. Much has been said of the legality of the QROPS NZ schemes and the possibility to access 100% lump sum in cash from the pension scheme as a British expat. When QROPS first came out, this was allowed, then NZ QROPS had to provide an income for life for 70% of the pension transfer. However, with the new UK pension flexibility rules, this has paved the way once again for you to transfer your pension and “cash it in”. However, this is not recommended due to IHT issues and the high cost of long term old age care. As long as your pension remains in a QROPS, you can target compounded returns and there is no tax on death as long as you remain resident abroad outside the UK.

The QROPS NZ is actually a highly regulated OECD pension scheme and is suitable for British expats in New Zealand and British expats who live offshore in countries which have Double Taxation Agreements with New Zealand. QROPS in NZ can be used as an appropriate vehicle for your pension to mitigate taxes including avoiding all UK taxation on your current pension as long as you remain tax resident outside the UK.

You can click here for the New NZ QROPS rules for 2017/18 and coverage of the New Zealand Financial Conduct Bill.

Originally, due to rules which allow New Zealand residents to access as much of their pension as they wanted, financial advisors were touting the New Zealand QROPS as a 100% cash-in of your UK pension. This loophole had been firmly closed by HMRC before, but with UK pension freedoms, this is now allowed in New Zealand for QROPS . You can take one tax-free lump sums or multiple lump sums or take no lump sum and just be paid a pension income or even use the QROPS in New Zealand just as a tax planning vehicle, parking the whole lot in the QROPS to avoid any tax on death. But, don’t forget the new five year rule as regards to the exit tax.

You can access 100% of your pension pot from age 55, but there will be exit fees, IFA fees and QROPS trustee fees to pay, but would still likely be substantially less than paying UK income tax.

There is no tax on retirement income at source in NZ and no tax on death in NZ.

Click here to discover the new NZ QROPS rules for 2017 and whether your UK pension is taxed in NZ?

There have been changes to both HMRC tax rules and New Zealand tax law which means that if you are a British expatriate in New Zealand, you should transfer your pension to a QROPS in New Zealand only rather than any other jurisdiction abroad such as Malta. If you transfer to a 3rd jurisdiction such as Malta, you will now get hit with a tax on your pension under their ‘Foreign Investment Fund’ (FIF) rules. This is an important distinction.

As of 2016/17, New Zealand will now tax overseas pension schemes if you are tax resident in New Zealand. So, really the only appropriate QROPS for a resident in NZ is a NZ QROPS / ROPS.

qrops nz

Why Not Leave My Pension in the UK? Why Transfer to a QROPS NZ?

Let’s examine a typical scenario facing British expats in New Zealand.

NZ QROPS Example

John decides to emigrate to New Zealand to retire. He receives around about £18k per year from his UK pension of which he pays around £3500 in taxes. This is deducted in the UK.

Every year, John has his UK pension paid out in New Zealand Dollars and he has claimed for this as a credit for the British tax he paid on it in his NZ IR3 tax return. The NZ Inland Revenue’s view is that John is not entitled to claim this tax credit and now want to tax John in New Zealand

The reason for NZ Inland Revenue’s view stems from the fact that HMRC signed away their rights to tax this income under the Double Tax Agreement (DTA) between New Zealand and the United Kingdom.

New Zealand now want to tax this income. They will deduct what you already paid in the UK and tax you in NZ. This could end up being more or less tax than what you already paid depending on your circumstances.

A transfer to a QROPS in NZ would avoid both UK and NZ taxation. Furthermore, the family would get the whole pension pot paid out upon death.

Using the example above, John has a pension pot of around £360,000. In the UK, he can take 25% or £90k as a lump sum and the rest would give him his pension income. In a QROPS NZ, he could take as much pension as he likes tax-free via pension income, a tax-free lump sum or a series of lump sums.

In the UK, depending on the type of pension, the spouse would normally get around half the income or about £9,000 p.a. upon death. Under a QROPS, his wife would get the entire £360,000 as a cash lump sum upon death. This could be the difference of paying off the mortgage or sending the kids though school. Furthermore, you can nominate the beneficiaries.

One of the other advantages is that it is discretionary managed with a range of investment options. Many pensions in the UK are tied to CPI (a measure of inflation which has historically been 2.81% from 1989 until 2013, whereas the cautious discretionary managed portfolio in the NZ QROPS we have been using for clients has averaged around 5% per year.

So, if you have a 300k pension pot at 50, by 65 it has grown to £454,623 in the UK if tied to inflation (assuming the average rate above).

Under a QROPS, that pension has grown to £623,678 (assuming the average 5% return historically delivered by the QROPS). So,not only do you avoid UK and NZ taxation, but have a bigger pot in which you can draw a higher lump sum from. Please note that this may not always be the case and historical returns are not a predictor of future returns. Your pension would be subject to market fluctuations rather than tied to inflation. A final salary pension in the UK gives you a guaranteed return as it is tied to inflation. You would be giving this guarantee up if you transferred to a QROPS in NZ.

Can I cash-in my UK pension through a QROPS pension transfer to NZ and take a 100% lump sum?

Yes, thanks to 2017/18 pension rules. Before, HMRC shut this loophole down, but this all changed when HMRC changes UK pension rules to allow full flexible drawdown. The QROPS scheme we use in New Zealand can now allow full flexible drawdown from age 55.

pension transfer to nz

New QROPS NZ Pension Transfer Guidance

(1) APSS263 form must be filled out to inform HMRC of the QROPS scheme you will be use and that you are aware of the new QROPS tax guidance

(2) There are revised reporting requirements which mean that your QROPS NZ pension trustees must inform HMRC for a period of 10 years after transfer. This doesn’t affect you directly as it is the trustees who must undertake these requirements, however it pushes up the cost of QROPS in the future due to increased admin costs for the QROPS NZ trustees.

(3) NZ QROP schemes should be open to residents as well as non-residents.

(4) Members can transfer up to £1,000,000 for 2017/18 onwards. Any amounts above this will be taxed at 25%. Click here for current levels and more guidance on the lifetime allowance for QROPS transfers to NZ.

(5) Any transfers to New Zealand may be subject to a 25% retrospective tax on your entire pension pot if you become resident outside NZ within five years of transfer. Although, there are options such as moving to another QROPS in the country you live in to help avoid this tax.

No (5) above is important. You must be very clear on your retirement intentions. Even if your plans change and it is not your fault, you will still be subject to a 25% exit tax.

QROPS NZ | The Benefits of a QROPS New Zealand

  • No UK income tax and no NZ income tax
  • No UK inheritance tax (IHT) or death tax; any UK pensions you draw down will automatically become subject to 40% UK IHT on top of any death tax the rest of your unused pension would face
  • Avoids up to 45% tax upon death after 75 in the UK and UK income taxes of up to 45%
  • Also no NZ tax on death
  • Avoids UK CGT if you own commercial property as part of your QROPS, although there are issues here and this may not be the best vehicle to move into, a SSAS may be more appropriate or other vehicle for your properties
  • Ability to steer clear of UK dividends tax
  • No NZ PIE tax: no tax on income in NZ
  • A Discretionary Fund Manager (DFM) is appointed, so you don’t have to worry about managing your funds
  • 5 strategies to choose from: cautious, conservative, balanced, progressive, adventurous
  • Access your entire pension pot as one tax-free lump sum, a series of lump sums, as a pension income or just roll up your pension as an estate planning tool passing the whole lot onto your children
  • Secure, well regulated pension environment in New Zealand and their first language is English

Taxes on NZ QROPS

Taxation will depend on where you live and where your QROPS is situated. The plan we use is registered as a ‘Foreign Investment Zero-rate PIE (Portfolio Investment Entity) Scheme’. This means that, generally, non-New Zealand tax residents will not pay New Zealand PIE tax on the foreign sourced income of the Scheme.

In other words a NZ QROPS avoids tax in the UK as long as you remain tax resident outside the UK.

It avoids the 25% exit tax as long as you remain resident in New Zealand for the five years subsequent to transfer.

There is no tax in New Zealand. If you move to another country after five years, there is no tax in New Zealand on your QROPS, but you may face income tax in your country of residence.

Tax on NZ QROPS for British expats in NZ

For a British expat who moves his UK pension to an NZ QROPS, your investment would grow tax-free and you would receive income from your NZ QROPS tax-free. You also avoid UK taxation on your pension scheme.

NZ QROPS Changes

Tax on 3rd Jurisdiction QROPS such as a Malta QROPS for British expats in NZ

For Brits in this situation, you can be taxed as your pension is seen as an overseas pension scheme under the New Zealand Inland Revenue department’s ‘foreign investment fund’ rules. This is because the NZ Inland Revenue requires taxpayers to declare their worldwide earnings including payments from third party QROPS. If you have just moved to NZ, you would receive a 4 year reprieve and then you would be taxed.

British expats who already hold a 3rd jurisdiction QROPS such as in Australia, Malta, the Isle of Man, Guernsey, Gibraltar or Hong Kong will have to pay back taxes on their pension. You can read more about the taxation on foreign pensions in NZ here, but the effective rate would be around 5% on a lump sum transfer to NZ. Click here for more info on the charges and effective rate of tax on foreign investment funds for Brits with a 3rd party QROPS living in NZ.

Tax on NZ QROPS for British Expats Who Live Outside the UK

For British expats who live outside the UK, the tax would depend on the country you live in as well as the Double Taxation Agreement between the country you live in and New Zealand. But, usually you just pay local income tax in your country of tax residence. There would now also be a 25% exit tax.

NZ QROPS Providers

There are many NZ QROPS Providers in the market. Click here for a QROPS list NZ.

Pension Transfers to NZ | Can a British Expat Receive an NZ Super?

Can I transfer my UK state pension to New Zealand?

No, you cannot transfer your UK state pension to New Zealand, but you can have it paid into a bank account in New Zealand. However, your UK state pension will not increase in line with UK inflation (CPI) once you have moved abroad. It will effectively be frozen.

What about a NZ Super? Can I receive this as a British expat in New Zealand?

Yes, there is a reciprocal agreement between the UK and NZ. You can claim the NZ Super, which is the New Zealand state pension scheme immediately when you turn 65, no matter how long you’ve been in New Zealand providing you qualify for the UK pension. If you don’t qualify for the UK state pension, you can still get the NZ state pension as long as you have lived in New Zealand for 10 years since the age of 20 with five of those years spent in NZ since you turned 50.

The New Zealand Super (the NZ state pension) is a bit more than the UK state pension; for example, a single person living alone would receive $348.92 per week (£183.25) from the NZ state pension as against the maximum of £107.45 per week from the UK state pension as of April 1st 2012.

QROPS NZ Pension Transfer. Who can take out a QROPS NZ?

Who can take out a NZ QROPS?

The QROPS NZ pension transfer is available to both NZ residents and residents in all other countries including British expats. So, anyone who has worked in the UK and built up a pension is eligible for a pension transfer to a QROPS NZ.

  • Members can transfer into a NZ QROPS whether they are UK resident or otherwise
  • You can transfer before you move overseas, but only benefit tax-wise once resident in New Zealand, otherwise your lump sum tax treatment would still be under UK rules
  • The scheme can accept transfers from most UK pension arrangements including transfers from Employee Sponsored (Final Salary or Group Money Purchase) or Personal Pension Schemes or SIPPs
  • Protected Rights and GMP funds are accepted into the scheme
  • The scheme can accept transfers from other international schemes
  • Additional Contributions can be paid into the QROPS in New Zealand
  • Additional lump sums may, subject to UK funding restrictions, be paid into a UK SIPP then transferred into the QROPS NZ.

The QROPS (NZ) Superannuation Scheme we use is registered with HMRC, Her Majesty’s Revenue and Customs, as a ‘recognised scheme’.

Who Would Benefit Most from a NZ pension scheme?

Any British expats or New Zealanders who have worked in the UK or other expats who have worked in the UK and are returning home to retire in New Zealand.

Countries with Double Taxation Agreements with NZ

  • Australia
  • Austria
  • Belgium
  • Canada
  • Chile
  • China
  • Czech Republic
  • Denmark
  • Fiji
  • Finland
  • France
  • Germany
  • Hong Kong
  • India
  • Indonesia
  • Ireland
  • Italy
  • Japan
  • Korea
  • Malaysia
  • Mexico
  • Netherlands
  • Norway
  • Philippines
  • Poland
  • Russia Federation
  • Singapore
  • South Africa
  • Spain
  • Sweden
  • Switzerland
  • Taiwan
  • Thailand
  • Turkey
  • United Arab Emirates
  • United Kingdom
  • United States of America

QROPS Specialists can help you complete your pension transfer to New Zealand and provide advice on which QROPS best suits your individual needs. For more information on a QROPS NZ Pension Transfer, please contact us.

How to Transfer a UK Pension to France

UK Pension Transfers to France

UK pension transfers to QROPS in France haven’t been allowed for many years now.

You used to be able to transfer a UK pension to a QROPS in France back in 2017 into a PERPS (Plan d’Epargne Retraite Populair), but that is no longer possible.

However, you can transfer it to a QROPS in Malta with no tax charge upon transfer. Qualifying Recognised Overseas Penison Schemes in Malta are regulated by the MFSA.

Malta is a European country with over 70 Double Taxation Agreements with countries around the world. 

You need to seek professional advice before deciding whether to transfer a pension offshore or not. Each case is unique and there isn’t a one size fits all solution.

How to Transfer a UK Pension to a QROPS in Europe

It can take several months to transfer a pension to QROPS in Malta. An adviser can guide you through the process.

Please contact us for more information.