“QROPS” stands for Qualifying Recognised Overseas Pension Scheme. It is a type of pension fund that most people with a UK pension scheme who are leaving the UK can transfer their pension pot into, without incurring a charge to UK income tax.

It is not the panacea for all UK pensions and there are a number of limitations on using QROPS.

It is only available for private pensions. You cannot transfer your entitlement to the state pension into a QROPS. You must actually be leaving the UK. Final salary schemes already in payment are also not permissible for transfer.

It is not permitted to transfer your pension into an offshore QROPS and withdraw an income free from tax, but your withdrawals are subject to the laws of the overseas country in which you become resident. (It may be possible to receive income from your retirement fund at lower tax rates than would apply in the UK).

You need not be a UK citizen, the rules apply to anyone with a UK pension, so foreign nationals who have worked in the UK and built up a UK pension fund during that time can use the provisions to transfer their fund into a QROPS.

You do not have to be retiring at the point of leaving the UK. Anyone who is emigrating from the UK can transfer their pension into QROPS.

Inheritance tax planning is an important feature in the decision to transfer your UK pension into a QROPS. The list of HMRC approved QROPS is several hundred schemes long, so there is a diverse range of jurisdictions to choose from. Accordingly, the member can select a jurisdiction to host their QROPS that has a preferential inheritance tax treatment to the UK. Unless a UK pension scheme member leaves funds to their spouse (or civil partner) or to a charity, there are limited opportunities to inheritance tax planning in the UK.

Aside from the issue of when withdrawals from funds can be made, QROPS schemes can also offer more flexibility about what the fund can contain. You don’t have to buy an annuity with a QROPS, so your pension’s value will live on with your chosen beneficiaries in the event of your death.

The financial benefits of transferring your UK pension can be huge if planned correctly. At Ariannol our aim is to maximise your expatriate status and help you achieve your financial goals by getting more out of YOUR Pension. We will only ever help you transfer to a QROPS if it the most appropriate decision for you.

If at anytime you need to speak to one of our specialist advisers then we are here to help.

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