What are QROPS?
QROPS are Qualifying Recognized Overseas Pensions.
As of ‘A’ Day in April 2006 the British government simplified pension legislation. The changes that took effect from this date mean that holders of UK recognised pensions are now able to transfer their pensions overseas.
To become a QROPS a scheme must fulfill and maintain requirements set down Her Majesty’s Revenue and Customs (HMRC).
There are several jurisdictions throughout the world from where QROPS providers are licensed.
Who is eligible to transfer their UK pension into a QROPS?
Anybody who holds a UK pension. You do not have to be a British citizen to eligible for a QROPS.
What are the benefits of QROPS?
- The amount of income tax that you will have to pay may be substantially reduced, or eliminated completely
- There is no requirement to purchase an annuity, which means you have more control over how you access your pension pot
- No annuity means that the insurance companies who provide the annuity DO NOT keep your retirement pot upon death. The remainder of your fund can pass onto your beneficiary
- You have investment control of where your pension pot is invested
- You can access your tax free lump sum (the amount will vary between 25% to 30%) and not have to immediately begin drawing down a regular income allowing you more flexibility to access funds when you want to.
