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QROPS

If you have worked in the UK, have built up a pension and now live overseas, then you will be aware of how frustrating it is having your pension stuck back in the UK. With the extra difficulty in keeping a track of your UK pension and the hassle of contacting the UK pension provider, it is no wonder many expats forget about their UK pension.

The Solution

There is now a way that you can move your pension out of the UK and take advantage of a number of benefits. This relatively new scheme is called QROPS. If you move your UK pension to a Qrops in a low tax jurisdiction such as Guernsey or the Isle of Man, you will get the benefits from that country. So as you can see, it’s where the QROPS is based that passes on the benefits, not where you the member resides.

QROPS Information

So what type of person would benefit, well everyone that takes an interest in their future plans in retirement. QROPS allows for complete control of your pension, why someone wouldn’t use this to make sure their life in retirement is all they dreamed of is unknown. Searching the internet brings up all sorts of information regarding QROPS. There is still a great deal of incorrect information floating around, but with the pressure from the HMRC to rid the market of miss selling and incorrect understanding, these sites are being dwindled down. Follow this link to read another good article about QROPS.

QROPS Benefits & Rules?

QROPS or Qualifying Recognised Overseas Pension Scheme is simply a pension scheme that has been given the QROPS status by the HM Revenue & Customs (HMRC). To achieve the QROPS title, the pension scheme must meet strict rules set out by the HMRC. Firstly the scheme must be outside of the UK and also be recognised as a pension scheme in the country or jurisdiction that it is in. Other rules are:
  • The QROPS cannot be an occupational pension.
  • The QROPS scheme must be recognised by the country it resides in for Tax purposes.
There are other more important rules that cannot be broken in any instance, for example, only a maximum of 30% can be withdrawn from the pension pot as a lump sum and that the pension scheme benefits can only be accessed at the age of 50. Since 2006, when QROPS was first introduced, these two rules have been broken repeatedly and the result was that HMRC struck the providers of the HMRC QROPS list and in the Singapore case, they removed the whole jurisdiction! Another benefit is that the GAD limits that are used will allow a member to draw down a higher amount that he/she could back in the UK. The GAD limit is taken from tables published by the Government and calculates what a pension member can draw down as a benefit. The calculation takes into consideration the member’s age, gender, status and Gilt Yield. The maximum limit in the UK is 120%, however, if a Guernsey based QROPS was chosen, 150% is available. If managing your pension was an issue, then a Qrops is an excellent solution. Choosing a Qrops with a built in investment platform will allow you to manage your own funds directly and simply. A simple email or fax to change or move you investments is all it will take. No need to contact and adviser and no need to send endless paper work with instructions.

Seeking a QROPS Adviser

QROPSThe nature of a qualifying recognised overseas pension schemes transfer will involve dealing with a UK pension and also the QROPS Provider who will be monitored by the HMRC. As this whole process and ongoing service will be overlooked by the UK regulatory bodies, it is imperative that regulated professional advice is taken. Again searching the web there is a great deal of companies offering advice, however 99% of these companies are not regulated either by the UK regulator FSA or even in the country that they are based. Outside of the UK regulations are very loose, so many companies use their location to get around the regulatory rules, be very careful.

One company that comes highly recommended is QROPS.net.






QropsAdviser
QropsAdviser 		Latest page update: made by QropsAdviser , May 10 2012, 4:21 AM EDT (about this update About This Update QropsAdviser Edited by QropsAdviser

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Keyword tags: expats pensions qrops retirement
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