Introducing QROPS
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QROPS pensions and how they work
If you have heard people talking about moving their UK pension overseas, you may think that it sounds like it would be a hassle. But think again. With the right support from your adviser, you may be able to leave them to do all the work involved in the transfer.
If you have heard people talking about moving their UK pension overseas (QROPS pension), you may think that it sounds like it would be a hassle. But think again. With the right support from your adviser, you may be able to leave them to do all the work involved in the transfer. So why should you get a QROPS pension?
This may not be the top of your list of priorities, but getting a QROPS pension means that the assets in your UK pension that you have worked so hard to build up would become exempt from UK inheritance tax. Some QROPS pensions fall within their own country’s IHT regime, but a good QROPS adviser will be able to tell you which do not.
More interesting perhaps from a day to day perspective is that QROPS pensions are exempt from UK income tax, as long as the investor lives outside of the United Kingdom for at least 5 years following the transfer. If you do not plan on being away from the United Kingdom for that long, you may wish to make alternative arrangements. However, if you plan to emigrate for at least 5 years, HMRC will cease to have an interest in your pension.
But there is more to a QROPS pensions than its UK tax exempt status. If you have already left the UK you may be sick of not knowing how much your monthly pension payment is worth in your pocket after it has been converted from sterling. You may also be sick of paying exchange rate fees. Accordingly, getting a QROPS could offer you the chance to hold your pension in the same currency that you spend, and could mean that you will save money on transfer and exchange fees.
Finally, imagine the choice that you would have if you have the world’s marketplace of QROPS to select your pension scheme from. Whether you want a classic Guernsey QROPS or an innovative Maltese deal, the choice is yours.