Overseas pension schemes that are eligible to receive a transfer from a UK pension scheme are called QROPS or Qualifying Recognised Overseas Pension Schemes. These comply with the rules laid out by the HMRC for overseas pension schemes.
In this section we will be explaining the pros and cons of transferring your pension into a QROPS, exploring the processes and timelines involved and highlighting the latest QROPS news.
If you would like any further information, or to discuss your case with with one of Chase Belgrave’s specialist financial planners, then please don’t hesitate to get in touch.
QROPS Pros and Cons
Chase Belgrave has seen a large increase in the number of people choosing to take advantage of a QROPS over the last few years. The potential flexibility and tax efficiency that can come with holding assets offshore means that this popularity isn’t surprising.
The benefits of a QROPS can include:
– Consolidation of many UK schemes into one overseas pension
– Less tax when drawing pension income
– Earlier retirement when compared with a UK pension
– The chance to pass the pension on to heirs without attracting taxes upon death
– The ability to hold funds in a choice of foreign currencies
The potential benefits of a QROPS will vary depending on your particular set of circumstances. It is important to retain advice on which scheme, jurisdiction and trustees are right for you.
While many expatriates are strongly inclined to consider a QROPS, it is important to note that not everyone will be eligible to take advantage of an overseas pension transfer.
Amongst the criteria for transferring a UK pension into a QROPS are:
– Having a pension scheme in the UK worth over £25 000 (or £100 000 if resident in the USA)
– A final salary scheme not being in payment, and no annuity having been purchased
– Planned or actual residence outside the UK
– Being between the ages of 18 and 75
Remember, the pension must be private or occupational. State pensions cannot be transferred.
If you meet these requirements and would like to learn more, please contact us for an in depth consultation.
QROPS Transfer Process
The process of transferring a UK pension into a QROPS is relatively simple but can be time consuming. The entire process from start to finish can take up to 6 weeks.
A typical procedure will involve:
– Consultation with a specialist financial advisor to determine aims, objectives and risk tolerance
– A detailed recommendation from your advisor based on your unique circumstances
– A transfer valuation of your current scheme will be obtained
– Completion of UK pension scheme discharge paperwork
– Obtaining a TVAS from an independent actuary if a larger final salary scheme
– If required, divestment of your current scheme assets will take place
– Proceeds will then be transferred to the destination scheme
Your adviser will then compile an investment portfolio to meet your growth/income requirements.
14th April 2014
The chancellor’s recent budget was watched with baited breath by millions and received with excitement – there was to be a radical overhaul of the way pensions worked in Britain. People would finally get access to their pensions with no need to buy an annuity.
Many, especially those of us in the pensions industry, will have had one eyebrow firmly raised. After all, the requirement to purchase an annuity was abolished in the genuinely radical pensions overhaul back in 2006 – what is commonly known as A-Day…
People considering moving their UK pension to a QROPS should heed new government guidance and seek independent advice, according to an industry expert.
Published in The Telegraph on 10 December 2013
HM Revenue and Customs (HMRC) has issued advice for those who wish to transfer their UK pension to a Qualifying Recognised Overseas Pension Scheme (QROPS)…
Published in The Telegraph on 26 July 2013
The QROPS scheme allows expats to transfer pensions abroad, but it can be confusing. Justin Harris, of independent financial advisors Chase Belgrave, explains all.
The Qualifying Recognised Overseas Pension Scheme (QROPS) is a set of rules outlined by HM Revenue and Customs (HMRC).
Overseas pension schemes must comply with these rules in order to receive a pension transfer from the UK without it being liable for a hefty 55 per cent unauthorised transfer charge…