User:What are QROPS

We are now regularly asked by our customers "What are QROPS?". They are a UK HMRC authorised scheme used for individuals who hold a UK pension plan and are intending on moving overseas. The QROPS, or Qualifying Registered Overseas Pension Scheme, is really a program whereby an individual moves their pension abroad to a scheme that includes a selection of financial benefits and presents higher control to the individual.

The main features of QROPS include;

- Ability to control your pension in a more tax efficient way

- Lower running charges

- Larger Investment Options

- Currency unpredictability is removed

The principal drawbacks of QROPS;

A current HMRC certified QROPS scheme can be taken off off the permitted list without warning if the HMRC believes that that it does not meet the requirements laid down in UK legal guidelines. In the case of Guernsey, 310 out from a total of 313 schemes ended up being taken off in April.

There is the prospective that HMRC could react retroactively towards QROPS schemes which it has de-registered and the pension holder may be held accountable for taxes avoided. Nonetheless this up to now has not taken place.

HOW QROPS WORK?

QROPS are registered with HMRC for individuals who hold a British pension fund and are looking to move overseas and become exempt from UK taxes and regulations.

The organisation 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 over Ten years after setting up of your QROPS, which you should 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 has been completed you may then only be liable to the financial authorities 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. However this is not critical to do. One can find over almost 1000 HMRC recognized QROPS Schemes, so there ought to be a scheme which can satisfy your requirements.

Schemes are based from Australia and New Zealand to Malta and Gibraltar. It's important to note that your QROPS does not need take place in the same country that you are domiciled. However there may be taxation issues which you might have to take into account with holding it in another country.

When I die what takes place with my QROPS?

All funds that are left in your QROPS when you die will be transferred 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 situations when a QROPS isn't suitable, and lots of times when they are. Please contact us here at http://myqrops.net for more info.