The United Arab Emirates, and in particular Dubai, is a popular destination for British expats. The vibrant international community combined with the hot weather and favourable tax regime means that you can live out your retirement in luxury.
Originally built on wealth generated by the oil industry, Dubai is also now a centre for financial services, tourism and shopping. Imagine being able to live the five star lifestyle every day!
But if you are retiring to Dubai, what do you plan to do with your pension? If you leave it behind in the United Kingdom, the British taxman will still be entitled to take his cut. Considering that you will be living in a virtually tax free place, needlessly handing over some of your hard earned cash could be difficult to stomach.
The advantages of living in Dubai and having a QROPS
One of the main advantages of living in Dubai is having virtually no tax to pay. And this is where getting a QROPS can really come into its own.
Unlike France or Spain, there are no complications or problems with trust like structures for QROPS. Accordingly, the UAE may be the perfect place to have one.
On the other hand, if you fancy holding your pension elsewhere, you’ll be pleased to learn that QROPS can be based anywhere in the world that HMRC has approved. So you could get a QROPS from a provider based in another low tax regime, like Guernsey, and receive the income in Dubai, without paying any tax at all. If you think this sounds like having your cake and eating it then you would be right!
Finding the right QROPS
Since you moved to the UAE you may have found that all kinds of financial advisers have contacted you and tried to offer you investment products. The trouble with QROPS is that the HMRC rules surrounding them are very complicated. Accordingly, using a financial adviser in the UAE who has no connection with the United Kingdom could be risky. Overseas investment products are tricky enough, but pensions are in a league of their own when it comes to complexity.
If an unregulated adviser gets it wrong, you could end up with a hefty tax bill to pay – and may even be liable for penalties on top of that. On the other hand, a QROPS adviser with a good understanding of HMRC’s rules can help to guide you through the rules and regulations to a lucrative QROPS for a Dubai dweller.