Who are QROPS for? It used to be the case that overseas investments were the preserve of the superrich, and they are sometimes held out as something that only multi-millionaires would be interested in.
However, in reality, anyone with a UK pension who is living abroad or thinking of moving abroad should consider getting one. QROPS investors are a diverse range of people who might include:
People who are going to be away from the UK for at least 5 years
This requirement is driven by a HMRC rule that QROPS investors must be non-resident for at least 5 years to enjoy the benefits of tax exemption. The rule is strictly policed and narrowly interpreted. Being non-resident may be more difficult than it sounds, as instead of totting up how many days you spend inside and outside of the country, HMRC looks at where the investor has their “centre of gravity”. This test involves a number of aspects, including looking at where the saver owns property and where their children are being educated.
The consequences of not staying outside the UK for 5 years could include a back dated tax bill and even a penalty, so it is a rule that needs to be carefully heeded.
…but not necessarily Brits
QROPS are available to members of UK pension schemes, but this does not necessarily mean that the savers who have them need to be British. In fact, QROPS are available to a wide range of nationalities. Perhaps you have been on a long work placement in London and accrued pension benefits as part of your package. In this case, it is still worth looking at a QROPS to see what tax, if any, you could save.