If you are looking for a QROPS, you may have focussed on the upsides including tax benefits, increased flexibility and a large choice of schemes.
However, a thorough appraisal should also involve a discussion of what getting a QROPS might set you back. So how much does a QROPS cost?
Providers’ fees
When QROPS were first introduced, QROPS providers basked in their investors’ delight at the ability to get their money legitimately away from the taxman. Accordingly, QROPS providers felt able to charge high fees.
Now that there are over one thousand schemes that have been approved for QROPS transfers, however, the tables have turned. QROPS investors have so much choice that the providers have had to make their prices much more competitive. You may even find that some providers offer a QROPS for around £500 per annum.
The price you pay in fees may depend on how individual the scheme is. On one hand, it may be that you want a bespoke scheme where you are the only member. In this case, you may have to bear the brunt of disproportionately higher administrative costs than you would for an off the peg scheme with hundreds of members.
Tax
One of the main points of QROPS is the ability to pay less UK income and inheritance tax. However, your QROPS may be taxable in its own country, and the payments you receive may be liable to local income taxes where you live. On the positive side, your country of residence and your QROPS country are both places that you will choose. Accordingly, you may be able to choose locations which do not place a high tax burden on your finances.
Advisers’ fees
Some QROPS advisers do not make any charge for their services – instead they get a commission from the providers themselves. However, a good QROPS adviser should be able to save you money by negotiating a discount on what the providers charge. This is particularly true when you are dealing with a large firm of advisers who place several hundreds of thousands of pounds’ worth of business every year.
