The impact of this is potentially very serious for UK pension policyholders whose benefits are approaching the 1.25m mark, as, from April 2014, any pension funds in excess of this figure will be taxed at 55% if benefits are taken from them.

This potentially renders a transfer to a QROPS scheme all the more attractive, as the Lifetime Allowance does not apply to QROPS schemes, and therefore funds in excess of 1.25m are not subject to the punitive tax charge under a QROPS scheme.

The history of the Lifetime Allowance noe makes ver interesting reading: it was introduced in 2006 at a level of £1.5m, and gradually increased up to 1.8m in 2011, only then to be reduced back down to 1.5m, and now furthere reduced to 1.25m. This perfectly illustrates the attitue of the UK government towards pensions chemes, if any further illustration were needed, which appears to be that they are not prepared to allow the necessary tax breaks that will encourage individuals to save provately for their pensions.

These changes in legislation do however further emphasise the pontential advnatages of a transfer into a QROPS pension scheme, and there are many individuals who should perhaps now give this further serious consideration.

This is welcome news for pension investors, who had seen their maximum income levels fall, dramatically in some cases, due to falling annuity rates,a nd also in some instances due to falls in stockmarket levels.

It is potentially particularly good news for QROPS policyholders who will be able to secure a potentially increased pension income, and combine this with the other benefits that QROPS offers, such as higher tax free cash, wider choice of investmet funds, differing currency denominations, and, perhaps most importantly, the ability to pass on the pension fund to family potentially free of taxation. These adavantages remain the primary reason that UK pension policyholders continue to transfer funds from UK pensions, and into QROPS schemes.

In addition, QROPS schemes are  not subject to the Lifetime Allowance (LTA) which it was announced in the Autumn statement will be reducing to 1.25m from 1.5m. Therefore if policyholders are nearing the 1.25m mark, it is perhaps in their interest to transfer to a QROPS scheme, thus potentially avoiding the onerous 55% charge which is applied to funds in excess of the LTA.

As always, expert indepenedent advice should be sought before any decison is made to transfer

Professional investors have increasingly become minded that markets now generally respresent a strong buying opportunity, as they represent very good value on a historic valuation basis, with both dividend levels and price earnings ratios now looking very attractive.

In addition recent bail out measures introduced both in Europe and in the US appear to have been very well received, with the consensus being that they will add a much needed stimulus to these markets, and to the wider global economy. The impact this is expected to have on QROPS funds is a positive one indeed, as these offhore pension schemes are expected to benefit from the upturn in thr global economy, and to the resultant improvement in the prices of both shares and copporate bonds. Should this happen, then this will be extremely good news for the thousands of UK expatriate pension policyholders, who have taken advantage of the extremely beneficial tax advanatages offered by these offshore pension schemes.

In addition, many final salary pension scheme members, who have moved from the UK to live abroad, are making the decision to transfer into a QROPS scheme, in order to take advantage of QROPS legislation, amid growing concerns over the future viability of final salary schemes.

Of course it goes without saying that it would not be in everybody’s best interest to transfer to a QROPS scheme, and it is therefore imperative that professionala dvice is sought before any such decision is made.

However, in the right cicumstances, a transfer to an overseas, offshore pension is highly relevant, and the recent upturn and restoration of confidence in global markets will only help to render this process a more attractive solution tot housands of UK expats looking to transfer their personal or final salary pensions.

These are namely that QROPS, which are effectively offshore pension schemes, should have the same rules avaialble to them as for local residents in the jurisdiction in which they are based.

In addition, QROPS schemes must have at least 70% of the transfer value received into the offshore pension scheme utilised in order to provide an income in retirement i.e. no more than 30% of the fund may be used to provide a tax free lump sum.

As long as these rules are satisfied, then there is no reason at all why the QROPS scheme should not retain its status as an offshore penson scheme, and benefit from the numerous tax advantages that these schemes continue to enjoy.

QROPS pensions are a very attractive solution for many people who have moved abroad and who have UK pension schemes, due to the tax and investment advantages they offer. Although recent rule changes were introduced by HMRC to try to remove abuse of QROPS rules that had taken place in such jurisdictions as Singapore, as long as the basic principles of QROPS policy are adhered to, namely that 70% of the fund must be used to provide an income in retirement, then there is absolutely no problem with a recommendation to transfer to a QROPS pension.

The ability to be able to choose from a wide range of investments, to pass on death benfits in full to family members, to vary the amount of income taken, to  be able to denominate the ension in a currecny of choice, and to be able to take income not subject to UK taxation, make QROPS pensions a very popular option, although as always professional independent advice must be sought in order to ensure that all factors have been taken into consideration in considering whether to transfer to a QROPS pension is appropriate.

This week saw a welcome return to confidence levels in worldwide stockmarkets, with most stockmarket indices recording their biggest rises for 18 months.

These rises were due in large part to the Eurozone leaders announcing fresh bailout proposals with regard to the Spanish economy and banks, which appear to have been well received, and to have restored confidence that Spain will not default on its debts.

Underlying the malaise that has afflicted Europe is the fact that coprorate earnings have generally held up very well, with relatively few companies, outside of the banking and retail sectors, having declared poor earnings results, let alone having issued profit warnings. As company performance has held up well, this bodes well for dividend yields, as most companies are in a position to be able to at least maintain, if not increase, dividends.

This in turn should provide a solid underpin for overall returns from equities, for example the FTSE 100 in the UK now has a dividend yield of approximately 4%, and this , cobined with capital growth, provides potential for consistent retunrs from equities over coming years.

Therefore our view is that equtities should form part of nearly all QROPS portfolios, in combination with other asset classes such as fixed interest and property.

the proble appears to be in HMRC’s opinion that QROPS schemes should be available in the same format to residents o the country in which the QROPS scheme is based, and if this is not the case then they will look to remove QROPS approval.

It appears that a more likely location for QROPS schemes in future will be countries such as Malta, who benefit from double taxation agreements with the UK, whilst still being members of the EU.

Therefore it appears that QROPS schees will continue to flourish in future, in the same wayt hat they have to date, but unfortunately it does not appear that this will be with the participation of Guernsey based schemes.

Allied to this is the continued fears over Greek debt default, and the contagion effect this may have in the rest of Europe, and it is clear that there is still a lot of potential downside in  Eurozone markets.

Thereore for the time being it appears sensible to avoid eurozone countries when considering areas in which to invest QROPS funds, and the fact is that the areas of investmetn with a ore positive outlook remain the US and the emerging markets, in addition to good quality corporate bond funds.

However care should be taken to ensure that there is a well diversified portfolio in place for QRoPS funds that will hopefully limit the downside risk of pension investments, and will enable investors to enjoy the advantages that QROPS schemes still offer.