Guide to QROPS
Qualified Recognized Overseas Pension Schemes were presented in the UK in 2006 as part of changes through the government's Pension Simplification project. Below we look at basic information to guide pensioners as they get around the world of QROPS.
Being a member of the United Kingdom UK private pension scheme, you can performyour pension transfers into a Qualifying Recognised Overseas Pension Scheme (abbreviated as QROPS), assuming that the QROPS you choose has been authorised by HMRC. Failure to choose the HMRC approved QROPS can result in scenario wherein the taxman may thinks that you selected that rogue scheme for reasons of tax evasion, which could lead to your penalties of up to 55% of the value of your pension plan.
In many instances, QROPS is going to be sold on their tax advantages. When you finally transfer your UK pension into a QROPS, you are not eligible to pay UK tax, provided the fact that you remain resident for tax purposes outside the United Kingdom for a minimum duration of 5 years.
Our recommendation is that you look for professional advice regarding tax residency in order to prevent ending up in the taxman's net as well. Obviously your QROPS will still be liable for taxes in your new country of residence - however with a very good QROPS specialist, you are able to find a place with the most beneficial tax regime for your expat pension.
QROPS may also help with your retirement planning. For the reason that you can choose a QROPS country of residence which will permit the tax free distribution of your assets to your beneficiaries.
Furthermore, QROPS have been proven to boost the financial versatility of pension holders. The availability of several QROPS schemes in so many countries gives the pension holder a broader selection of wider variety of options to choose from in terms of underlying assets than any other pension scheme in the United Kingdom.