A Qualifying Recognised Overseas Pension Scheme (QROPS for short) is an international pension plan, recognised by HMRC. As an international plan, it can benefit from local taxation and adapt to your changing circumstances - particularly of use for those retiring offshore where residency and taxation are a key component of long-term income planning.
For any pension with a value over £30,000, you are required by law to seek advice from a qualified finance professional before proceeding with a UK pension transfer to a QROPS.
Although with something as important as your retirement plans it could be argued that any transfer, regardless of size should only be completed after receiving professional advice.
Transferring your UK pension to a QROPS can be advantageous if the UK pension in question is from your time with a previous employer. If this is the case, you will be what is known as a deferred member and as such your pension will only grow in line with inflation. It’s worth noting that if you have moved to a different entity within the same group of companies, your pension has most likely become dormant.
However, it’s important to consider the merits of all options available as often the best course of advice is to do nothing. You can read more about the pros and cons of UK Pension Transfers by clicking here.
Most UK Defined Benefit Schemes can be transferred to a QROPS. However, there are two instances when a UK pension transfer is not possible. 1) Public sector unfunded defined benefit scheme members are prohibited from transferring and, 2) where an employee is within one year of their retirement age, although in this case, it is left to the discretion of the trustees of the scheme.
There are a number of tax benefits when transferring your UK pension to a QROPS. Pension funds can be passed down to family members free of UK Inheritance Tax (IHT) and scheme charges on death at any age.
Whether you are looking at your pension options for the first time or you have an existing QROPS you have already transferred your UK pension to a QROPS, Skybound’s team of global pension experts are on hand to help you make the best choice for you.
You can reach us directly by calling us between the hours of 8:30am and 5pm at each of our respective offices and we will immediately assist you.