A QROPS Transfer is the transfer of assets from your UK Pension Scheme into a Qualifying Recognized Overseas Pension Scheme (QROPS).
In April 2006 the UK HMRC introduced the QROPS for individuals meeting certain requirements. There are a number of rules which you must be satisfied if you are able to take advantage of a QROPS Transfer.
The individual must be:
- 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 5 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 provider 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 10 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- Up to 30% may be withdrawn from the fund and given to the in the form of a lump sum.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 how to conduct a QROPS transfer and to speak to an advisor click here.