GOZOPAZ

Thanks, Ray51. Please let me know what you find, and I will reciprocate.... I will be making some more postings as my understanding of QROPS increases. Cheers!

GOZOPAZ

Sorry bakedbean and Ray: I looked at the wrong message heading...

Peter Crawley

I think careful consideration should be given to where you believe you will be living when you start to draw the pension benefits.

Whilst ensuring your QROPS is good value for money and taking good investment advice is important, all the initial good work could be undone by currency fluctuations and your needing to live on the currency that was affected. ( For many pensioners outside the UK and drawing pensions from UK funds, the weak pound is causing real hardship )

There are a huge number of considerations to think about and, bearing in mind the size of some of the personal pension funds, it has to worth doing your research.

Tax residency, domicility, FX flexibility, charges, investment adivce provider, professional insurance, qualifications , juristiction, local pension rules and, not least, a bit of due diligence on the QROPS trustees.

Note that the HMRC QROPS list is very carefully worded and that schemes on that list are not approved, they are merely recognised. An important distinction.

Good luck with your research.


P

RWolfe

Hi - I am very interested in this area.
Did you see my article on this subject? (see below) - this attempts to highlight main considerations regarding your private pension options.
In analysing various QROPS schemes there are many considerations and I am not sure that any one place will have expertise in them all.
Each QROPS jurisdiction will have certain pros and cons - some still suggest that they can achieve some form of pension busting - these may well come under scrutiny from HMRC
On top of all the issues regarding charges, currency, benefit flexibility it is also worth exploring the ways in which the underlying investments may be structured. Some of the Channel Island schemes promote the use of offshore bonds as the investment solution. This brings up another layer of charging issues to investigate and possibly more importantly consideration should be given as to how income will eventually be taken from the investments. Not all will be able to cater with taking income from different asset classes at different times - this may prove to be a very important point.
http://britishexpats.com/articles/fi...ion-to-canada/

GOZOPAZ

Thank you, Peter.

Your advice is very pertinent.

bakedbean

I read your article which was interesting, though realize that your expertise lies in UK and Canada but..... you don't mention anything about the 5 year non-UK residency rules.

As I understand it, once 5 year non-UK residency is achieved, there is no requirement for a QROPs provider to inform HMRC of any transfers received, or lump sum payments made. So how would that come under scrutiny?

Agree with you regarding the weak Pound. It's a bit of a lottery.

For me personally, I am already retired (early) but haven't taken any UK pension as yet. I have income from tax-free investments here in Asia and I can bring in offshore income tax-free into Malaysia and that is plenty for me to live on currently. The frozen UK pension/QROPs conundrum - thankfully I'm not relying on that - but, all the same, it would be nice to get some dosh out of it at some point in the future. At the moment, I keep kicking the QROPs idea down the road.

It's a pity we don't have a general Pensions/QROPs section on BE. I just keep tagging onto different threads all over the place

Peter Crawley

If you read the HMRC page, where it lists the recognised QROPS, it mentions that if a scheme is on the list that, for want of a better phrase, turns out not to be following the rules then it can be removed. So, that is one way a scheme could come under scrutiny. Hence the due diligence that people should undertake in choosing a QROPS. You cannot rely on that list, given the wording of HMRC.

Whilst there may be no reporting requirements for a period over 5 years of non residency, there are instances where this may not be the case.

The HMRC manual states that an unauthorised payment charge is not dependent on how long a member has been non-resident. It says: “It applies regardless of whether or not a transfer member has been non-resident for more than five tax years. Nor is there any time limit on the requirement that the manager of a Qrops reports to HMRC any payments that are referrable to a transfer member’s taxable asset transfer fund.” I think this clarification related to residential property( and perhaps other non allowable investments) but it shows that HMRC can take an interest after 5 years.

Also, if the QROPS is in a juristiction with a double taxation agreement with the UK, then HMRC can easily obtain a UK national's investments without having to get special permission.

This all goes back to choosing the best QROPS for you, having checked out the QROPS trustees and the adviser as best you can.

P

Mitzyboy

Hmm, for th likes of us then its just like sucessfully checking out, say, the Northern Rock Bank a few years back before it all went horribly wrong ........

RWolfe

The following is a link to an article that highlights the 5 year non uk residency position.
http://www.escapefromamerica.com/200...n-qrops-abuse/
Agreed that a general QROPS section on BE would be most useful - As QROPS are relatively new (ie since 2006) we are all in something of a learning curve -Like mentioned previously it is unlikely that one source will have expertise in all jurisdictions.
Another point worth highlighting is that there is no requirement for a transfer analysis for a transfer from defined benefits (final salary) scheme to QROPS - this is another area that can lead to misleading advice.
Think many are kicking the QROPs idea down the road - but will likely make some decision before actually taking benefits.

Peter Crawley

I cannot argue with that. Hence my comment " as best you can".

I suppose the ónly analagy I can use is something like " You cannot guarantee that you car won't be stolen, but if you lock it, park it in a sensible place and have a good alarm system then you reduce the risk" .

Mitzyboy

I do understand. Its difficult for everyone. Ive been asking my IFA for advice now for a year on the general situation as it is, and all I can get is "dont panic". Basically he has no advice to give as he just doesnt know what will happen

Meow

What no one has mentioned is that QROPS, which are all essentially QNUPS, vary depending on where they are based. There are some variations between Malta, Guernsey and New Zealand, for example.


Yes, I am an IFA, UK qualified etc, but I am not here to sell. I only advise when asked to. I'd prefer people to be better informed as there is a whole load of nonsense spoken about QROPS/QNUPS much of it from so-called advisers who don't understand the implications. It's more complicated that most people think and the rules do change and will continue to do so. QROPS are not, in my view, suitable for the majority of expats.

Peter Crawley

Due to the complex nature of the advice that is needed, I am sure some people will be of the same opinion. However, as this is potentially a useful financial planning tool, UK expats do need clear and understandable ( A big ask that!) information about QROPS.

Perhaps a dedicated page on this site would be useful, with one caveat-
That people that post on it declare their interest in the spirit of transparency.( I am a retired employee benefit consultant/pension consultant and I am not employed by an advisory firm).

Mitzyboy

You can ask admin if you like, but my personal opinion having read threads contributed to by so many IFAs and companies is that they all seem to have a different picture of it .... thereby I'm afraid I dont think many have a clear understanding of the full implications ...... hence as I have said before .... I'm out

Domino

from the horses mouth as it were