Probably because I removed the link he posted to a QROPS site!

I have very recently moved my pension fund into a QROPS scheme. After much researching I settled on using Blevin Franks to handle the process.

Regarding taking tax free cash this is what I was told:-

"You could take 25% of the pension fund in cash, unfortunately, this is liable to tax in Spain which will be levied on the gain element, i.e. premiums paid into your pension fund divided by the value of the pension fund at the time of withdrawal will give you the percentage split of capital leaving the remainder as income." An illustrative calculation followed.

The 25% can be taken at any time up until the fund is crystallized, i.e you start to draw income from it, not only at the point of transfer.

I believe that you cannot take the remaining balance of the fund as cash IF the QROPS providor is fully compliant with the UK QROPS rules.

well I for one will not be feeding him
there was enough of this on another part of this forum that didnt go anywhere just arguing about I did and You cant etc etc.

and the funny thing is I am looking at the pros and cons of QROPS for myself but will make my own decisions without taking advice from a forum contributor.

kr

advertising.. I think this thead defies that statement.

It is so confusing. so many website and people are saying different things.

I just wanna make sure it's legit and that I can draw as much of my pension as possible.

FWIW Blevins Franks as a company are UK FSA regulated and so is the individual IFA who we worked with. Their registration numbers check out on the FSA website. This is one of the main reasons that I chose them.

So I'm inclined to believe that they are telling me the truth as it currently stands..

Other than being a customer I have no connection with the company.

Interestingly though, they told me something different to you.

I was told that if I used New Zealand, then I would be able to take 100% of the funds once I met the criteria (5 tax years outside of UK etc.)

Hmmmmmmmmmmmnnnnnnnnn, interesting. I sent the guy an email half an hour ago asking the question.

Isn't that the point of forums.. getting advice from people..

Thanks to everyone who offered advice.. no thanks to the paranoid

well glad all my advice was useful
just remember that advice off forums such as this are as useful as asking down the pub

caveat emptor

Yeah.. sure.. thanks Domino

Leaving completely aside the rights or wrongs of 100% encashment one thing which has been entirely ignored or forgotten is the question of tax in Spain.

Clearly such a sum will fall under the heading of world wide income and would, almost by definition, fall into the highest 43% bracket. That would be guaranteed take the smile off most faces so I'd be interested in hearing how people plan to avoid, or have avoided, this ?

In the other thread I linked to the contributor concerned openly boasted that he had banked a cheque for €80,000 in the Irish Republic and whilst I'm not familiar with the tax system there I think it unlikely that such a windfall would escape the attention of the Irish taxman. If nothing else under EU money laundering directive deposits in excess of €15000 are reportable.

Also someone mentioned that Blevins Franks are regulated by the UK's FSA and I'd be equally interested to know how that is relevant to advice given in Spain, or indeed anywhere outside the UK ?

It really depends what you do with that money. It's clearly not income and wealth tax is now 0%. If it is invested, say, in a Spanish Portfolio Bond, then it is only the gain and any withdrawals from that gain which is taxable.

When I have moved sums of money from UK to Spain, I have told the bank (correctly) that this money is from the sale of my business - they are happy with this. When preparing my tax return, my gestor doesn't seem to care where the money has come from.

If the money is taxable, then how should it be declared?


by-the-way, rightly or wrongly, my bank tells me that the figure of €15000 was raised to €30000 last year.

well that shows how inflation plays a part - only 10 years ago it was £10,000

In Spain, any lump sum payments from pension plans are taxable as income.

There is a calculation which determines how much of the lump some is income from the investment of the funds and how much is the return of capital invested. This will depend on how long the fund was running and other factors.

The amount that is deemed to be the income element is taxable as savings income and declared on your annual RENTA declaration. The savings tax rates are 19% on the first €6000 and 21% thereafter.

I don't know if there are special terms in Spain for money from a QROPS scheme but as that is a UK tax issue I doubt it - Blevins Franks should know the answer to that.

.