QROPS are Qualifying Recognised Overseas Pension Schemes and consist of a foreign pension scheme which has been approved by Her Majesty's Revenue & Customs to accept pension transfers from the UK.
A QROPS offers enormous financial benefits for ex-pats now living or planning to live out their retirement abroad.
A wide variety of UK pensions can be passed over into a QROPS.
These include personal pensions, occupational pensions, stakeholder pensions, self invested personal pensions (SIPPs) and pensions used for contracting out of state earnings related pension schemes (SERPS).
If your pension is currently in draw down and benefit payments are already being taken you can still transfer your pension into a QROPS as long as you are receiving alternatively secured or unsecured income and providing the QROPS supplier is willing to accept this type of transfer.
However, if you have already purchased an annuity or are currently receiving payments from your pension in an occupational final salary scheme then unfortunately you can not transfer your pension into a QROPS.
It is worth remembering that occupational and personal pension funds which are transferred into a QROPS will have no affect whatsoever on your eligibility for a UK state pension and if you have more than one pension scheme then you can also transfer several pension schemes into just one QROPS which makes keeping track of your retirement savings much easier.
Access to your pension fund in a QROPS works in a way that during the first 5 complete tax years you will only be able to take benefits in the same way as you would be eligible to them if you were still resident in the UK.
After the 5 year HMRC reporting period, access to the fund will then be dependent on the jurisdiction that the QROPS has been set up in and the individual rules of the QROPS provider.
It may also depend on your country of residence on whether you will be subject to any taxation consequences or not.
Some of the better QROPS pension schemes will typically allow a lump sum in the region of 30% of the pension value to be withdrawn tax free.
The costs associated with a QROPS transfer can depend on several factors such as pension fund size, individual circumstances, the type of QROPS chosen and the nature of the benefits.
All these factors will play a part in determining the amount of the corresponding costs.
In general the costs as a percentage work in a way that the larger your pension fund, the lower the charges will be.
Transfer values can start as low as ¤50,000 although funds of ¤200,000 upwards will be able to qualify for some of the better QROPS plans.
As a guide, a set up charge between 0.
5 - 1.
0% of the pension fund value will apply with additional yearly maintenance charges in the region of ¤1000 that are levied each year depending on the fund value and structure.
By getting in touch with a QROPS adviser you can obtain accurate and detailed costs relative to your specific situation.
Time wise, the transfer of a pension into a QROPS plan usually takes around 1 to 3 months to complete with each particular case varying as individual circumstances will play a part in the length of time required for a successful QROPS transfer.
A wide variety of investment vehicles will become available to you by carrying out a QROPS transfer, some of these include UK invested trusts, fixed interest investments, listed property trusts, managed funds and stocks and shares.
Purchasing residential property with a QROPS is also something that is possible but also an option that is subject to conditions.
All QROPS are subject to the relevant legislations in the jurisdiction to which they have been passed over to once the member has been a non UK tax resident for 5 years or more.
There are indeed QROPS jurisdictions that permit this type of investment although generally via indirect ownership by means of a corporate structure.
In certain cases you can transfer your held assets into a QROPS without having to liquidate them into cash first although this will depend on whether the assets you hold are within an insurance company based scheme.
If this is the case then your assets will be converted into cash and the subsequent transfer into a QROPS will be made in cash.
However, if your registered pension scheme is a small self administered scheme (SSAS) or a SIPP and providing the trustees and administrators of the receiving scheme are willing to accept them, then there may be a possibility to transfer your existing assets into a QROPS.
If you are wondering on what offshore pension provider is best to transfer your existing pension scheme into then you should be aware that there is currently a huge selection of QROPS providers to choose from which operate out of many different QROPS jurisdictions.
Some of the better known jurisdictions offering attractive QROPS solutions include Guernsey, Isle of Man, Gibraltar and New Zealand.
In general it is recommended to opt for a QROPS jurisdiction where (after the member has been a non UK tax resident for 5 years) a wide variety of benefit options and investment vehicles become available.
Some of the main factors to consider are transparency of charges and tax efficiency and the option of not having to purchase an annuity.
Also, look for strong investor protection principles and well established QROPS jurisdictions that are similar to those associated with the UK.
By speaking with a QROPS adviser they will be able to identify which particular QROPS scheme and jurisdiction is best suited to your particular situation.
There really isn't many reasons why you should not transfer your existing UK pension into a QROPS and with the majority of cases the potential benefits to be gained by the decision to transfer your pension into a QROPS makes it very worthwhile.
However, your particular case may be as such that you have guaranteed annuity rates that were put in place at a time where there was much higher interest rates than there are today.
If this is indeed the case then it may be best to stay put.
In any case, it is specifically because of reasons such as this that you really should seek QROPS advice from a QROPS consultant to discover what is best for you.
A QROPS offers enormous financial benefits for ex-pats now living or planning to live out their retirement abroad.
A wide variety of UK pensions can be passed over into a QROPS.
These include personal pensions, occupational pensions, stakeholder pensions, self invested personal pensions (SIPPs) and pensions used for contracting out of state earnings related pension schemes (SERPS).
If your pension is currently in draw down and benefit payments are already being taken you can still transfer your pension into a QROPS as long as you are receiving alternatively secured or unsecured income and providing the QROPS supplier is willing to accept this type of transfer.
However, if you have already purchased an annuity or are currently receiving payments from your pension in an occupational final salary scheme then unfortunately you can not transfer your pension into a QROPS.
It is worth remembering that occupational and personal pension funds which are transferred into a QROPS will have no affect whatsoever on your eligibility for a UK state pension and if you have more than one pension scheme then you can also transfer several pension schemes into just one QROPS which makes keeping track of your retirement savings much easier.
Access to your pension fund in a QROPS works in a way that during the first 5 complete tax years you will only be able to take benefits in the same way as you would be eligible to them if you were still resident in the UK.
After the 5 year HMRC reporting period, access to the fund will then be dependent on the jurisdiction that the QROPS has been set up in and the individual rules of the QROPS provider.
It may also depend on your country of residence on whether you will be subject to any taxation consequences or not.
Some of the better QROPS pension schemes will typically allow a lump sum in the region of 30% of the pension value to be withdrawn tax free.
The costs associated with a QROPS transfer can depend on several factors such as pension fund size, individual circumstances, the type of QROPS chosen and the nature of the benefits.
All these factors will play a part in determining the amount of the corresponding costs.
In general the costs as a percentage work in a way that the larger your pension fund, the lower the charges will be.
Transfer values can start as low as ¤50,000 although funds of ¤200,000 upwards will be able to qualify for some of the better QROPS plans.
As a guide, a set up charge between 0.
5 - 1.
0% of the pension fund value will apply with additional yearly maintenance charges in the region of ¤1000 that are levied each year depending on the fund value and structure.
By getting in touch with a QROPS adviser you can obtain accurate and detailed costs relative to your specific situation.
Time wise, the transfer of a pension into a QROPS plan usually takes around 1 to 3 months to complete with each particular case varying as individual circumstances will play a part in the length of time required for a successful QROPS transfer.
A wide variety of investment vehicles will become available to you by carrying out a QROPS transfer, some of these include UK invested trusts, fixed interest investments, listed property trusts, managed funds and stocks and shares.
Purchasing residential property with a QROPS is also something that is possible but also an option that is subject to conditions.
All QROPS are subject to the relevant legislations in the jurisdiction to which they have been passed over to once the member has been a non UK tax resident for 5 years or more.
There are indeed QROPS jurisdictions that permit this type of investment although generally via indirect ownership by means of a corporate structure.
In certain cases you can transfer your held assets into a QROPS without having to liquidate them into cash first although this will depend on whether the assets you hold are within an insurance company based scheme.
If this is the case then your assets will be converted into cash and the subsequent transfer into a QROPS will be made in cash.
However, if your registered pension scheme is a small self administered scheme (SSAS) or a SIPP and providing the trustees and administrators of the receiving scheme are willing to accept them, then there may be a possibility to transfer your existing assets into a QROPS.
If you are wondering on what offshore pension provider is best to transfer your existing pension scheme into then you should be aware that there is currently a huge selection of QROPS providers to choose from which operate out of many different QROPS jurisdictions.
Some of the better known jurisdictions offering attractive QROPS solutions include Guernsey, Isle of Man, Gibraltar and New Zealand.
In general it is recommended to opt for a QROPS jurisdiction where (after the member has been a non UK tax resident for 5 years) a wide variety of benefit options and investment vehicles become available.
Some of the main factors to consider are transparency of charges and tax efficiency and the option of not having to purchase an annuity.
Also, look for strong investor protection principles and well established QROPS jurisdictions that are similar to those associated with the UK.
By speaking with a QROPS adviser they will be able to identify which particular QROPS scheme and jurisdiction is best suited to your particular situation.
There really isn't many reasons why you should not transfer your existing UK pension into a QROPS and with the majority of cases the potential benefits to be gained by the decision to transfer your pension into a QROPS makes it very worthwhile.
However, your particular case may be as such that you have guaranteed annuity rates that were put in place at a time where there was much higher interest rates than there are today.
If this is indeed the case then it may be best to stay put.
In any case, it is specifically because of reasons such as this that you really should seek QROPS advice from a QROPS consultant to discover what is best for you.