QROPS Benefits

We are regularly asked by our clients “What are QROPS?”. These are a UK HMRC recognized scheme used for individuals who hold a UK pension plan and are planning on moving abroad. The QROPS, or Qualifying Registered Overseas Pension Scheme, is a system whereby any person moves their pension plan abroad in to a scheme which includes a number of financial benefits and offers greater control to the individual. The primary advantages of QROPS include;

Ability to manage your pension plan in a more tax efficient way Reduced running charges Better Investment Options Currency movements is removed

The principal negative aspects of QROPS; A current HMRC accredited QROPS scheme can be removed off the certified list with no warning if the HMRC thinks that it does not are eligible laid down in UK law. In the case of Guernsey, 310 out of a total of 313 schemes ended up taken out in April.

There is the prospective that HMRC may action retroactively against QROPS schemes which it has de-registered and the pension holder may very well be held responsible for taxes avoided. Nevertheless this as of yet has not taken place. HOW QROPS WORK?

QROPS are registered with HMRC if you happen to hold a British pension fund and are interested to move overseas and become exempt from UK taxes and regulations.

The company that operates the QROPS scheme must be authorized by HMRC and should be competent and taxed inside the country which it is operated from.After you have been a UK non-resident for more than Ten years after setting up of your QROPS, which you ought to be able to prove. Your QROPS Scheme are able to stop notifying HMRC of your withdrawals from your scheme and will no longer be subject to UK pension laws.In the event the Ten year transition period has been completed you may then only be prone to the financial regulators where you are domiciled and where your QROPS Scheme is located.

How to transfer your QROPS?

As a rule of thumb it should take around 2-3 months to transfer your pension into a QROPS. The process is speeded up if you can in-cash your pension into cash. Nevertheless this is not important to do. There are actually over almost 1000 HMRC authorized QROPS Schemes, so there must be a scheme which can satisfy your requirements.

Schemes are based from Australia and New Zealand to Malta and Gibraltar. It’s worth noting that your QROPS does not need be held in the same country that you are domiciled. However there could be taxation problems that you must take under consideration with holding it in another country.

When I die what takes place with my QROPS?

All funds which are left in your QROPS when you die will be transferred onto your beneficiary’s and fortunately are not subject to British inheritance taxes.

Significant when establishing a QROPS is that you take professional advice. There are many situations when a QROPS isn’t suitable, many times when they are.