Are you an ex-pat Brit who is interested in making his or her pension go a little further? Have you heard of the term QROPS? By transferring your UK pension into a suitable QROPS or Qualifying Recognised Overseas Pension Scheme, you could take advantage of a whole host of excellent benefits. In the following post we are going to look a number of these benefits.
Able to Have Your Pension Based in A Different Country
As long as you qualify and meet the HMRC’s requirements, if you transfer your British pension into an appropriate QROPS you have the chance to base it in either the jurisdiction you are currently living or a completely different one to take advantage of tax legislation advantages there. Interestingly, if you move regularly between different countries, there are some QROPS providers that offer multi-jurisdictional schemes.
Get Pension Income Without UK Income Tax Deductions
The income tax in other countries is much lower than it is in UK, this includes the income tax on pensions. Therefore, if you transfer your money into a QROPS, depending of course on the taxation laws of the country you are living, you could benefit from a considerable reduction in the income tax you need to pay.
Not Required to Pay Tax on Assets
When you have money in a QROPS, following on nicely from the above point, you are able to grow your funds without them being subject to income or capital gains tax.
A Lump Sum of UP to 30% That’s Tax-Free
According to the transfer regulations for QROPS, you only need to keep 70% as retirement income. This basically means that, based on the QROPS you decide to use, you could have access to a lump sum of around 30% of your pension fund, which is a lot more than the 25% you receive when you have a UK Personal Pension Plan.
Easy to Pass Your Wealth On
When you choose a particular QROPS to transfer your existing pension fund into it, you can nominate specific beneficiaries. This means when that when you pass away or you want to pass on your wealth, you can transfer it easily to your relatives quickly, easily and without hassle. This isn’t always the case for UK pension schemes, because there are often restrictions in place, like differences in ages of spouses, for instance.
Consolidate Multiple Pensions
If you have a number of different UK pension funds, you could use a QROPS to consolidate them all, making the management of your investments easier, as well as maximising your growth and reducing your charges.
Some of the more outdated pension schemes in the UK have come under fire for unclear charges that are not always expected and have a considerably negative effect on the pension fund. When you choose a QROPS to transfer your pension money into, all of the charges will be explained to you clearly, so that you know exactly what is happening with your money.