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We are now continually asked by our customers "What are QROPS?". They are a UK HMRC recognized scheme used for individuals who hold a British pension plan and are thinking about moving abroad. The QROPS, or Qualifying Registered Overseas Pension Scheme, is really a system whereby individuals moves their pension plan overseas in to a scheme which has a number of financial gains and provides larger control to the individual.
The main benefits of QROPS include;
- Ability to take control of your pension in a more tax efficient way
- Reduced running fees
- Better Investment Options
- Currency movements is removed
The principal disadvantages of QROPS;
A current HMRC permitted QROPS scheme can be taken off off the accepted list without warning if the HMRC believes that that it does not met the criteria laid down in UK regulation. In the example of Guernsey, 310 out of a total of 313 schemes ended up removed in April.There is a prospective that HMRC could very well act retroactively against QROPS schemes which it has de-registered and the pension holder may very well be held responsible for taxes avoided. However this as of yet has not happened.
HOW QROPS WORK?
QROPS are registered with HMRC for people who hold a British pension fund and are wanting to move overseas and become exempt from UK taxes and legislation.
The agency that operates the QROPS scheme has to be authorized by HMRC and must be capable and taxed inside the country which it is operated from.
Once you have been a UK non-resident for more than Ten years after setting up of your QROPS, which you needs to be able to prove. Your QROPS Scheme will be able to stop notifying HMRC of your withdrawals from your scheme and will no longer be subject to UK pension laws.
Once the Ten year transition period may be completed you will then only be prone to the financial authorities where you are domiciled and where your QROPS Scheme is situated.
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 operation is speeded up if you can in-cash your pension into cash. Nevertheless this is not important to do. One can find over almost 1000 HMRC approved QROPS Schemes, so there needs to be a scheme which can meet your needs.
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 possibly be taxation complications you could possibly have to take into 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 passed onto your beneficiary's and fortunately are not subject to British inheritance taxes.
Vital when establishing a QROPS is that you take specialist advice. There are many times when a QROPS isn't suitable, and lots of times when they are. Please contact us here at http://myqrops.net for more information.
