"What are QROPS? QROPS is an acronym for Qualifying Recognised Offshore Pension Schemes as well known by the Her Majesty’s Revenue and Customs (HMRC). They came into effect within the pension simplification rules of April 6 2006. The objective of this section of the legal procedure was to permit a United kingdom pension owner to transfer their funds overseas once they retire to another one QROPS jurisdiction.
So who should consider a transfer to a QROPS?
A person with a UK pension plan that is either looking to move to another country or maybe already aiming to move overseas no matter whether your pension is currently in payment or not. Additionally those expatriates who have developed UK pension plan benefits also can think about QROPS transfer.
Exactly what are the benefits associated with this sort of transfer? This list is by no means inclusive nevertheless the most popular factors are;
1. To have your pension plan paid in the same currency that you just live in so to steer clear of the erosion of your income as currency prices change.
2. Ability to avoid UK income tax on your pension income which usually, dependant upon your country of residence will mean you have to pay a lower rate of tax and consequently receive more money.
3. To never need or be forced to buy an annuity, which means you can receive your pension income as the way you see fit.
4. To be able to pass on your remaining pension fund to your beloved ones on your death. Rather than pay 55% in tax to the Great britain Government.
5. Greater investment selection and flexibility which suggests you’re able to maximise your fund growth.
Who should you trust your money with?
You should consider 3 key points as part of your own due diligence;
1. Make certain you are using an agency who has experience in industry.
2. Make sure that your advisor does a full transfer assessment, along with the benefits and drawbacks of a transfer including costs, jurisdictions and tax factors.
3. Due to the sophisticated nature make sure the specialists are qualified to the industry standard to QCF Level 4. Anyone without these accreditation won't be doing you justice. There are plenty of QROPS jurisdictions where you're able to find a HMRC authorized plan, including Malta, Jersey and the Isle of Man. Nonetheless there are a selection of policies which were brought in during April 2012 by the UK Government which has had a severe affect on the number of schemes which qualify under the new HMRC rules.
HMRC thought that although a lot of the schemes were being meeting with the letter of the law but they also weren't in the spirit of the law. Guernsey schemes were especially horribly hit as schemes registered up until April 2012 allowed non-residents to pay no taxes on the policies when residents were required to pay taxes. This is often in contravention of the new rules and therefore 310 out of the 313 rules have been taken off the recognized list.To learn more about QROPS along with the continuous alterations to the schemes please contact us at MyQROPS.net.