QROPS Rules Explained
There are a number of QROPS rules established by the HMRC that must be adhered to when transferring your QROPS offshore.
Individuals must:
- Not already have an annuity
- A member of a UK work or personal pension fund
- Plan or live outside of the UK for at least 10 years
Under UK QROPS rules an individual is unable to conduct a QROPS transfer if:
- They only hold a UK state pension
- The individual already has an annuity
- The pensioner remains as a UK tax resident
To conduct a QROPS Transfer the QROPS rules detail that the scheme must be:
- Authorised by HMRC – click here for the complete list
- Financially regulated in the jurisdiction with which it is registered
- Submit annual reports for each individual to the HMRC for the first 5 years of operating their scheme. After 10 years the provider does not need to submit any further information.
- Any QROPS will always follow the tax jurisdiction of the country where it was established and if some countries do not impose a tax on pensions, then no tax will be charged to the individual as well.
Following a QROPS transfer to draw funds from a QROPS the individual must:
- Have reached the pensionable age of 55 years old
- 70% of the entire fund must be applied to the creation of a lifetime income for the pensioner.
- Up to 30% may be withdrawn from the fund and given to the in the form of a lump sum.
For more information on the QROPS Rules and Regulations please contact us here.
