QROPS Specialists

QROPS Guide

Qualifying Recognized Overseas Pension Scheme

QROPS is a Qualifying Recognized Overseas Pension Scheme which came into effect on April 6, 2006. The Inland Revenue decided to allow expats who peviously worked in the UK to transfer their pension schemes offshore to HMRC approved QROPS so that they can take advantage of tax breaks due to the fact that these expats now reside offshore and will no longer be claiming the majority of UK benefits.

Who qualifies for a QROPS tranfer?

UK taxpayers who intend to move or have already moved outside the UK.
Anyone in this situation who has been in the UK and contributed to a private pension scheme should be able to transfer out. Most private pension schemes can transfer into a QROPS. SERPS, S2P (second state pension), FSAVC's, S32 buyout plans, occupational pension schemes, defined contribution (money purchase) and defined benefit (final salary) pension schemes may all be transferred.

Who cannot transfer into a QROPS?

• UK state pensions cannot be transferred.
• Pensions which have already bought an annuity.
• Certain occupational final salary pension schemes in drawdown (Please email to check if your pension can transfer out).
• Non-UK pension schemes.

Do I need to transfer my QROPS to the country I live/retire in?

No. You can hold your pension in a different country than where you retire to. This is often done for security and tax purposes. For example, you can transfer your pension to the Isle of Man or Guernsey for security reasons, whilst living and retiring in Thailand. This allows your pension to grow in a country with an efficient tax regime, effectively reducing your tax to near zero. You can then have your retirement income paid directly to your bank account in the country you reside in abroad or paid directly into an offshore account.

Why would you move into a QROPS?

As taxes increase in the UK, it makes sense to find a safe jurisdiction such as the Isle of Man or Guernsey to administer your pension in a tax efficient environment.

Income tax in the UK is charged at between 20%-50%, capital gains tax is 18%-28%, dividends tax is up to 42.5% and inheritance tax is 40% above the threshold.

A QROPS transfer protects your pension from UK taxes whilst allowing you to invest in a much wider range of investment options and strategies. You can also hold your pension in many different currencies. It also allows you to invest in commodities such as gold, silver and oil.

From an estate planning viewpoint, QROPS allows you to pass all of your pension pot onto your loved ones upon death. Under a traditional UK penion scheme, typically a spouse gets only half and the kids get even less. You also do not have to purchase an annuity, which gives your pension a chance to grow. A typical UK pension scheme grows at around 3%. A move into an open architecture gives you the change to earn 7% per year or more if you wish to take higher levels of risk.

For a free qrops guide and free consultation, please email qrops@credendaassociates.com

Credenda Associates are QROPS specialists who have been dealing with pension transfers since their launch in 2006. All QROPS are different and there are thousands. We have whittled them down to the best ones. For the most flexible QROPS to suit your situation with the lowest fees and best client service, please contact qrops@credendaassociates.com