QROPS Glossary

QROPS Glossary – Please find a list of the key terms used in pensions and their transfer offshore

Annuity:

A series of regular payments. Annuities are usually purchased by a lump sum of cash e.g. pension schemes generally discharge their promise of pension benefit by purchasing an annuity. Individuals can purchase using own capital. Wide range of options available e.g. level, escalating, guaranteed, single or joint lives.

Defined Contribution:

Another term for ‘money purchase’ pensions. A pension scheme where the final pension will be the result of an agreed contribution input, rather than an agreed formula output, as with a final salary scheme.

Domicile:

The country that a person considers to be, and treats as, a permanent home and which forms the closest ties. An essential element when dealing with legal and taxation matters.

HMRC:

HMRC stands for Her Majesty’s Revenue and Customs. It is responsible for the collection of taxes and the payment of some forms of state support.

Jurisdiction:

Strictly speaking, the legal power of a court, but often taken generally to mean within a particular sphere of influence.

Lifetime Allowance:

Lifetime Allowance is the limit set for an individual’s UK pension fund. It is fixed at £1,800,000 until April 2012 when it will reduce to £1,500,000.

Provider:

The entity that is authorized and regulated to offer a QROPS. This will usually be the Trustee of the scheme.

Qualifying Recognised Overseas Pension Scheme (QROPS):

QROPS is a pension scheme set up outside the UK, recognized by the UK HM Revenue & Customs as meeting certain standards and conditions.

Residence:

A place in which a person has a home. Someone living in a country whether domiciled or not, whether a citizen of that country or not.

Transfer Value:

Generally taken to mean the cash value of accrued pension benefit in an occupational pension scheme.

Tax Allowance:

An allowance creates reduction in taxable income, unlike a tax relief, which arises when an expense is incurred.

QROPS Glossary Additional Questions

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