Services - UK Pension Release - QROPS
Did you know that if we can help you transfer your UK pension overseas that:-
- You will never have to buy an annuity
- You can pass your remaining pension pot on to your loved ones after your death
- You have investment freedom
Until recently it was not possible to transfer a UK pension to another country. This is because, in return for the tax-relief received on your pension contributions, Her Majesty's Revenue & Customs (HMRC) makes it compulsory to purchase an annuity with 75% of the pension's final value regardless of where the pensioner retires in the world. Any residual value on the pensioner's death is collected by HMRC rather than being passed to the deceased's estate. Today, with the permission of HMRC through a Qualifying Recognised Overseas Pension Scheme (QROPS), it is possible to move your pension offshore and benefit - without the compulsion of purchasing an annuity.
Full information can be found at QROPS Guide. Abbey Financial Solutions are specialists in the arrangement of QROPS and can give advice to clients looking to release their UK pensions.
What is a QROPS (Qualifying Recognised Overseas Pension Scheme)?
A QROPS is a recognised overseas pension scheme that meets certain requirements. The rules of the scheme must be broadly equivalent, in terms of tax treatment, to a UK registered pension scheme and the scheme manager must provide HMRC with information on certain 'events'.
However, if the QROPS is administered in a country where there is no stipulation on how retirement benefits are taken, it is possible to transfer the benefits to an international pension where the pension's value can be withdrawn after the age of 50 without any tax deducted at source. For an expatriate therefore, there is no obligation to buy an annuity.
Who can move their pension into a QROPS?
Anyone that holds a UK pension scheme who intends to live outside of the UK for more than 5 years, or who has been living overseas for 5 years, is eligible. Therefore, this scheme applies as much to Australians, New Zealanders and South Africans (and any other nationality) who have worked in the UK as to British expatriates.
What is the minimum transfer I can make into a QROPS?
There is no minimum level. However, it may not be efficient to transfer a single smaller pension into a QROPS. Abbey Financial Solutions can advise on the most efficient vehicle based on the size of your pension 'pot' and the length of time you have until you retire. Generally the minimum is 50,000 GBP although our average pension transfer is for approximately 200,000 GBP.
Is there any Taxation on the Transfer?
A transfer of a registered pension scheme to a QROPS is a benefit crystallisation event (BCE). This means it will give rise to an additional income tax charge where the transfer exceeds the individual's lifetime allowance. Currently, this allowance is set at £1,500,000. Below this amount there is no taxation at transfer. Anyone with a pension fund larger than £1,500,000 who is contemplating such a transfer should obtain specialist advice from Abbey Financial Solutions before proceeding.
Can I return to the UK after taking the benefits?
Yes, you can return without prejudice. However, to ensure there is no taxable event, we would recommend seeking our advice before returning to the UK.
For impartial advice on whether it would be in your best interests to transfer you pension benefits overseas, just click here to provide us with your preferred contact details. Abbey Financial Solutions do not charge for providing the pension transfer analysis and there is no obligation to proceed. Any transfer of pension benefits would be directly from your existing pension provider to the QROPS provider authorised by the HMRC. Contact us today.
