QROPS for UK Pension Holders
- If you hold a UK pension and are a resident of any country other than the UK, current pension legislation permits you to transfer your pension assets into a registered QROPS pension plan.
- This plan allows you to control and access your pension assets prior to the mandatory retirement age with 100% withdrawal of your pension assets free of UK taxes after 5 qualifying years.
- The QROPS is open to all nationalities. If you are a Canadian, Australian, New Zealander or any other nationality who has worked in the UK as a British Expatriate, you can apply for a QROPS.
To inquire about transferring your UK pension assets please complete our no-obligation questionnaire below:
Background Information on the QROPS
Following the changes to UK pension legislation on April 5, 2006, International Pension Schemes have all but become extinct. Open to all non-UK tax residents is an overseas pension scheme ("Overseas Scheme") which is registered with Her Majesty’s Revenue & Customs ("HMRC") as a Qualifying Recognised Overseas Pension Scheme ("QROPS") for this purpose.
A QROPS is structured in a similar manner to a UK pension, i.e. there is an investment vehicle which is owned on your behalf by a pension administrator (trustee). The difference arises where the pension administrator is based outside the UK and only reports back to HMRC.
The Overseas Scheme is specifically designed to enable non-UK resident individuals, who have accrued pension benefits in the UK, to transfer these out once they have left the UK. Provided that a UK Registered Pension Scheme and an Overseas Scheme have the appropriate transfer out and transfer in powers respectively, individuals who leave the UK and become a member of an Overseas Scheme, are able to request a transfer of their UK benefits.
The Overseas Scheme is open to all nationalities. If you are a Canadian, Australian, New Zealander or any other nationality who has worked in the UK as a British Expatriate, you can apply for an Overseas Scheme. This service may be particularly useful for those who currently reside in Switzerland, Jersey, Guernsey, the Cayman Islands, the Bahamas, British Virgin Islands, Bermuda and the Isle of Man.
Due to the fact that the Overseas Scheme is an international contract, income can be taken abroad and taxed at the local rate and is not subject to either capital gains or income tax. An Overseas Scheme provides asset protection and tax effective planning opportunities. More importantly, after the policy has been running for five years there will no longer be any obligation to report to the UK HMRC.
- There is a minimum of £150,000 that can be transferred into an Overseas Scheme and the plan can accept a transfer from any type of pension scheme. There are no limits on contributions to the fund.
- There is no requirement to purchase an insurance annuity.
- You may only hold assets admissible under UK Pension rules and choose your own investment strategy investing in mutual funds, stocks, bonds, alternative investments, deposits, commercial real estate, private equity, options etc.
- Your investments may be denominated in any major convertible currency and with the consent of the trustee; you may choose your own suitably qualified fund manager.
- Fees for the Overseas Scheme are on a sliding scale with initial start-up fees from 3.0 to 5.5% and an annual management fee to the trustee of 0.75% per annum subject to a minimum of $4000 USD and a maximum of $25,000 USD.
- The pension plan is governed by law and the trustee is regulated by their local monetary authority.
How can I confirm the legitimacy of the QROPS?
Details of the QROPS can be found on the HM Revenue and Customs website. The pension advisor is UK based and registered with the Financial Services Authority.
Related Links
HM Revenue & Customs - www.hmrc.gov.uk/pensionschemes
QROPS - www.hmrc.gov.uk/pensionschemes/qrops.pdf
