QROPS Benefits

We're frequently asked by our clients “What are QROPS?”. These are a UK HMRC accredited scheme used for individuals who hold a British pension and are thinking about moving overseas. The QROPS, or Qualifying Registered Overseas Pension Scheme, is a program whereby individuals moves their pension plan abroad to a scheme which includes a number of financial gains and gives more significant control to the individual. The primary attributes of QROPS include;

Ability to control your pension plan in a more tax efficient way Lower running costs Better Investment Opportunities Currency volatility is removed

The principal disadvantages of QROPS; A current HMRC accredited QROPS scheme can be removed off the approved list with no warning if the HMRC thinks that it does not met the criteria laid down in UK legal guidelines. When it comes to Guernsey, 310 out from a total of 313 schemes ended up being removed in April.There's the potential that HMRC could very well react retroactively towards QROPS schemes which it has de-registered and the pension holder could possibly be held liable for taxes avoided. Nevertheless this as of yet has not taken place. HOW QROPS WORK?

QROPS are registered with HMRC for people who hold a British pension fund and are seeking to shift overseas and become exempt from UK taxes and legislation.

The company that operates the QROPS scheme has to be authorized by HMRC and should be competent and taxed inside country which it is operated from.

Once you have been a UK non-resident for over 10 years after establishing 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.When the Ten year transition period have been completed you will 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 plan into a QROPS. The operation is speeded up if you can in-cash your pension into cash. This is not necessary to do. There are actually over almost 1000 HMRC approved QROPS Schemes, so there must 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 be taxation complications which you might must take into account with holding it in another country.

After 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.

Crucial when establishing a QROPS is that you take specialist advice. There are many times when a QROPS isn’t suitable, and plenty of times when they are.