QROPS and Pension Transfers

QROPS

QROPS is the HMRC approved way to transfer your UK pension offshore. You can do this with most pensions providing you're living outside of the UK, or intend to be within the next 6 months. Your pension should have a total value of at least £25,000 to be considered worthwhile to transfer.

There are huge advantages to transferring your pension offshore, and very few disadvantages.

The primary advantages: Reduced Tax Liability, Increased Flexibility and Greater Growth Potential.

Pension transfers are taken out by most expatriates, though only a few have found the QROPS plan best suited to their specific circumstances. In view of this, Which Offshore has researched the market and identified IFAs that meet our stringent criteria. In view of the low level of unbiased QROPS information on the internet, talking to a financial adviser should be your first step.

Reduced Tax Liability

Because QROPS are based in key offshore jurisdictions they benefit from zero taxation at source. While in your country of residence you may be liable for taxation on your income, you will avoid capital gains tax on asset growth, as well as potentially avoiding inheritance tax.

Increased Flexibility

You will have the option to either select an asset management strategy that best reflects your risk level and growth or income requirements, or where your transfer value is above £100,000 you’ll be able to work with your IFA to construct a bespoke asset management plan.

You won’t have to purchase an annuity – rather you’ll be able to opt for a percentage drawdown instead, of up to 20% more than you could get by leaving your pension in the UK. You will be able to select the currency of your choice, perhaps Euros if you live on the continent, or Dollars if you live elsewhere.

Greater Growth Potential

If your pension exceeds £100,000 you may be able to select an offshore portfolio bond to hold your investments. This is usually a cost effective method for your IFA to broker or buy a wide variety of investments in order to help your pension pot grow and thus provide you with the best possible income. Where your pension is less than £100000 your IFA should select an automated asset management strategy in order to meet your growth requirements while keeping costs to an absolute minimum.

The next step in your research should be to have a preliminary discussion with a QROPS specialist adviser. Please click here in order to have a Which Offshore approved adviser contact you.