A QROPS adviser should start off by listening to you, because that’s how they will learn about your aspirations and plans for the future. It is vital that your adviser understands what you intend to do so that they can recommend the right product for your situation.
For example, the UK income tax free status of a QROPS is dependent on the investor being resident for tax purposes outside of the UK for at least five years following the transfer of their pension. If the investor returns to the UK to live within that time, they risk having to pay the tax that would have been due during their absence. There may also be a penalty to pay.
The rules on residence are far from crystal clear, so expats or would be expats should get their adviser’s opinion on whether their lifestyle is sufficiently detached from Britain to free them from the status of a UK taxpayer. Recent legal cases have meant that the issue is often blurred, and needs to be examined on a case by case basis.
Aside from deciding this important residence question, investors also need to tell their QROPS advisers about their current pension provisions, and their other savings. From this information your adviser will not only be able to glean your risk profile but also how your current UK scheme stacks up.
Sometimes a British defined benefits private scheme might be such an attractive deal that a QROPS may not be advisable. However, if you have a pension scheme in the private sector, most investors find that it is at least worth investigating QROPS as a possibility.
From your initial conversation, your QROPS adviser will get to know what your priorities are for retirement. For some, the focus will be providing a steady income in a particular currency. Others will want to access lump sums, so they do not want to be locked into an annuity. Whatever your plans, QROPS providers are located in countries all over the world, so there will be a QROPS out there to suit your needs.
