QROPS are overseas pensions that can provide excellent retirement planning, providing the scheme does not break any of the UK taxman’s strict rules.
Below are some explanations about QROPS basics with links to more detailed information on QROPS.net:
Who can start a QROPS?
Anyone with UK pension rights that intends to retire permanently overseas, like:
- UK taxpayers who intend to or have already moved outside the UK
- International workers returning to their home or another country
Why would someone transfer a UK pension to a QROPS?
Anyone who passes the pension rights and residency tests can take advantage of tax effective and flexible investment options that allow a pension fund a broad scope of currencies, commodities and markets that are not open to a UK pension investor.
These include managed and self-invested QROPS.
Where can a member live and where does a scheme have to be set up?
A QROPS can be based in any country outside the UK, providing the scheme follows the rules stipulated by HM Revenue and Customs.
One advantage is a QROPS can be set up in one country while the member can live somewhere else. This allows the pension to grow in a low tax jurisdiction while the benefits can be paid out in any major currency in another country with low income tax rates.
What is a QROPS?
QROPS is the short name for a “Qualifying Recognised Overseas Pension Scheme’.
QROPS were launched on April 6, 2006, as part of new legislation aimed at simplifying pensions.
The jargon means:
Qualifying – that the scheme meets HM Revenue and Customs QROPS rules
Recognised – the scheme is regulated by the tax authorities in the country where the QROPS is opened
Overseas – the QROPS is a scheme based outside the UK
Pension Scheme – A scheme giving benefits to someone in the event of his/her:
- Reaching a particular age
- Suffering serious illness or incapacity
A pension scheme does not have to give benefits in all these situations, for instance, if the scheme gave death benefits in service only, it would still meet the definition.
When can you transfer to a QROPS
UK pensions can transfer in to a QROPS at any time, as long as the UK pension fund has not been used to buy an annuity.
Visit the Glossary for more explanation of terms used throughout this site
For more detailed information about starting a QROPS transfer, contact QROPS.net
Please follow these links for further reading: