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  • Up to 30% may be withdrawn from the fund and given to the in the form of a lump sum.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.