kerrygreen

Just thought I would let people know that if you are living in Ireland (or anywhere other than UK) and still have a pension in the UK, you can release the entire pension fund (all legal and done by professionals).

There is no age restrictions and the entire fund can be taken as cash.

I have just transferred 2 UK works pensions and have just had 80,000 euros put into my bank.

Happy days!!

Horus

Personal pension or State?

kerrygreen

They were both occupational pensions. Unfortunately, the State Pension cannot be transferred.
(SNIP)

Londonuck

Not sure i'd be advertising that Kerry!

kerrygreen

Nothing untoward, I assure you.

It was carried out using a QROPS which the HMRC introduced in 2006 allowing ex=pats to transfer their UK pensions out of the UK to a country of their choice.

If you have been out of the UK for more than 5 years the entire pension fund can be taken as cash.

Mitzyboy

This of course can be fraught with danger and there have been various threads on this in the forums.

Its a good idea to get input from a completely independent financial adviser befpre even investigating the route

kerrygreen

I must admit there is a lot of mis-information regarding QROPS, most of it in the form of horror stories.

The plain facts are that it is extremely straightforward, entirely legal and is approved by HMRC.

I have just gone thru the process and despite some private misgivings initially, the whole episode was smooth and without any hassle.

Mitzyboy

And again, people should consult an independent expert first. Not every financial avenue suits every person. It may have been god for you, it's not the solution for everyone. This isn't misinformation, it's common sense advice

Londonuck

I meant advertising whats in your bank account

kerrygreen

Oh, right. Well, it won't be in there too long!!

Londonuck

Moving to Ireland, it wont be

kerrygreen

Not moving - been here nearly 10 years.

Im_and_Er

I'm sorry but you have been, misinformed, misled, or both and have potentially exposed yourself to a 55% tax demand by HMRC.

Regardless of how long you have been non UK resident a QROPS provider is not permitted to pay out the entire sum in cash, or busting as it is termed, it's part of the agreement with HMRC for them to operate as a QROPS and a clue is in the name Qualifying Recognised Overseas Pension Scheme

Yes, after 5 years of non UK residence HMRC reporting obligations are lifted but if they subsequently become aware that a provider is doing this then they can retrospectively tax the recipient at a marginal rate of 40% plus a penalty of 15%.

I suggest you read this article, although dated 2008 nothing of significance has changed.

http://www.bfca.eu/blog/bid/28416/QR...ension-Schemes

In short to pay out 100% a provider will have to move the funds outside of the QROPS which of itself contravenes the rules.

In addition, although I am not familiar with tax rules in the Irish Republic, I would be extremely surprised if you could receive such a sum without incurring a local tax liability.

By the way I also have a QROPS and know the rules.

kerrygreen

The 70% income for life rule does not apply to all QROPS - see SI 2006 / 206. Schemes in Switzerland, Australia, New Zealand are but examples of jurisdictions where their QROPS allow for lump sums of more than 30% - and for those who have been non UK resident for more than five complete tax years there are no unauthorised payment (UP) tax implications. The following extract from an e mail received from HMRC confirms both positions and is worth a careful read : "Where a payment is reportable, it is covered by the UK's 'Authorised Member Payment' ("AMP") provisions and the associated 'Unauthorised Payment' ("UP") charges. The legal reference point for these charges is Schedule 34 of Finance Act 2004. What this means in simple terms is that any payment that falls within the reporting timescale described above must be in keeping with what a UK registered pension scheme could have paid in identical circumstances. Where it doesn't, this would constitute an UP and a liability to an UP charge will arise. That can be up to 55% of the part of the payment that is considered to be an UP. That is made up of 40% UP charge and 15% surcharge. As regards lump sum payments, they would have to meet all the three conditions set out below to be within the member payment provisions and so not give rise to a liability to a UK tax charge on the transfer member:

* Be paid on or after reaching 'minimum pension age' (currently age 50 but rising to age 55 from 6 April 2010).
* Be paid in conjunction with the commencement of a lifetime income, annuity or scheme pension.
* Amount to no more than 25% of the original transfer payment.

Where the payment by the QROPS takes place outside the five years described above and so is not reportable to HMRC, the AMP provisions and the associated UP charges do not apply.

Mitzyboy

I know I keep chipping in .... but people ought to be aware that local taxes can apply. For instance a tax free pension lump sum in the UK is actually taxable in (for example) Spain if you have been an expat for 1 year, 5 years or whatever. If you are living in another country then you have to live by their tax laws.

Kerry ... you're beginning to sound like someone who is trying to sell Qrops