QROPS Are Now More Affordable Thanks To Reduced Fees
With a noticible number of QROPS (Qualifying Recognised Overseas Pension Scheme) providers reducing their fees, there has never been a better time to consider transferring a UK pension to an overseas scheme.British Expats living overseas, with UK pension provisions could be eligible to apply for an HMRC approved overseas pension, a QROPS. With a noticible number of QROPS (Qualifying Recognised Overseas Pension Scheme) providers reducing their fees, there has never been a better time to consider transferring a UK pension to an overseas scheme.
British Expats living overseas, with UK pension provisions could be eligible to apply for an HMRC approved overseas pension, a QROPS.
QROPS benefits can be substantial, such as:
Passing QROPS to the next of kin(s:
100% of the capital value can be passed to the next of kin(s). The remaining QROPS fund at the time of the member’s death, is available to be passed on to their next of kin(s), even if the member has been previously receiving a regular income.
Initial access to capital:
If required, a withdrawal up to 25-30% of the value of the pension fund can be effected, depending on the scheme and it’s jurisdiction.
A QROPS give members financial flexibility when considering investment options, allowing a good choice of asset classes, including stock markets, mutual funds, packaged investment products, commodities etc… (these include offshore assets that are unavailable to UK investors).
QROPS investments can be made in most major currencies. Pension benefits can be paid gross in most local currencies, if required, which removes potential currency exchange rate fluctuation problems.
Applicants do not have to reside in the same tax jurisdiction as a QROPS, to the contrary a QROPS can be based in a tax-free jurisdiction and therefore beneficial to fund growth. Memebers can move between countries without the need to make further pension transfers. Pension benefits are taxed as income in the country where the pension holder is resident for tax.
QROPS are not subject to UK Inheritance Tax (IHT), although a form of tax may apply in some jurisdictions upon the member’s death. Some form of local inheritance tax might be payable, depending upon where the member is domiciled at the time of death.
No annuity or ASP purchase:
Usually UK pension holders must buy an alternative secured pension (ASP) or an annuity at 75 years of age, or pay an 82% tax charge on their fund, however, this is not required with a QROPS.
No Lifetime Allowance (LTA) charge:
QROPS are exempt from LTA charges / penalties from breaching the threshold.