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 draw retirement benefits 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.
Why Consider Setting up a QROPS in New Zealand?
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 in New Zealand
- you have pensions from more than one employer and want to bring your pension together under one platform which is more easily managed in New Zealand
- you’re moving to New Zealand and want to move your UK pension to a pension scheme in New Zealand
- you are already resident in New Zealand and want to move your UK pension to a pension scheme in New Zealand
- you want to move your pension out of the UK and into a regulated pension scheme in New Zealand
Tax on a NZ QROPS for Residents in New Zealand
- No tax on death at source
- No tax on growth
- There is a double taxation agreement between the UK and New Zealand
- Local taxes in New Zealand 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 New Zealand within five years of transferring your pension scheme.
So, only move your pension scheme to a QROPS in New Zealand if you intend to stay in NZ for a period of five years or more, otherwise there is a 25% Overseas Tax Charge or “exit tax” which will be applied.
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.
For more information, please contact us.