Qrops And Expats
If you are a UK expat entitled to a pension fund, then you must have definitely heard about QROPS or Qualifying Recognized Overseas Pension Scheme. With stringent tax regulations imposed by the UK Government for UK residents wanting to retire abroad, QROPS is a pension scheme which allows expats to transfer their pension funds to countries where these schemes are prevalent, thereby escaping the strict tax regimes of HMRC.
As per the recent UK Government regulations, expats can now access their pension funds from the age of 55 as against 50. The QROPS pension fund has several benefits for an expat who could have never enjoyed it as a UK pension saver. Firstly, by transferring your UK pension fund to an overseas QROPS account, you ensure that you can no longer be taxed by the UK government. These pension schemes are in existence world over at centers approved by the HMRC. There are several locations like New Zealand, the Isle of Man, Guernsey and Ireland which have very flexible tax regulations. You can keep your pension fund in any of these countries for enjoying the tax benefits, even while continuing to reside in any country of your choice.
Unlike UK pension schemes, QROPS offers you great financial flexibility by allowing you to invest in various stock markets, commodities and assets all over the world. It facilitates greater control over your funds and also lets you decide how to utilize it. By investing your money in proper markets, you can multiply your earnings.
This pension scheme also allows you to deal in all major currencies of the world. It gives you the benefit of accessing your funds and making investments in any currency you want, which bypasses the fluctuations of exchange rate. So, wherever you go, you shall have the liberty to invest your funds in the local currency of the region. Moreover, it does not require you to buy an annuity at the age of 75 like UK pension schemes. Without an annuity, your pension fund remains a part of your estate, which you can transfer to your family members without being taxed, which means you can leave behind your entire fund to your beneficiaries.
Although the benefits are many and it does not even require a lifetime allowance charge, transferring your UK pension fund to a QROPS scheme does come at a cost. For funds less than 30,000 in value, the transfer charges could outweigh the gains. Moreover, if an expat someday decides to return to the UK, his pension fund may be taxable by the UK government.
As per the recent UK Government regulations, expats can now access their pension funds from the age of 55 as against 50. The QROPS pension fund has several benefits for an expat who could have never enjoyed it as a UK pension saver. Firstly, by transferring your UK pension fund to an overseas QROPS account, you ensure that you can no longer be taxed by the UK government. These pension schemes are in existence world over at centers approved by the HMRC. There are several locations like New Zealand, the Isle of Man, Guernsey and Ireland which have very flexible tax regulations. You can keep your pension fund in any of these countries for enjoying the tax benefits, even while continuing to reside in any country of your choice.
Unlike UK pension schemes, QROPS offers you great financial flexibility by allowing you to invest in various stock markets, commodities and assets all over the world. It facilitates greater control over your funds and also lets you decide how to utilize it. By investing your money in proper markets, you can multiply your earnings.
This pension scheme also allows you to deal in all major currencies of the world. It gives you the benefit of accessing your funds and making investments in any currency you want, which bypasses the fluctuations of exchange rate. So, wherever you go, you shall have the liberty to invest your funds in the local currency of the region. Moreover, it does not require you to buy an annuity at the age of 75 like UK pension schemes. Without an annuity, your pension fund remains a part of your estate, which you can transfer to your family members without being taxed, which means you can leave behind your entire fund to your beneficiaries.
Although the benefits are many and it does not even require a lifetime allowance charge, transferring your UK pension fund to a QROPS scheme does come at a cost. For funds less than 30,000 in value, the transfer charges could outweigh the gains. Moreover, if an expat someday decides to return to the UK, his pension fund may be taxable by the UK government.
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