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QROPS

What is QROPS?

A QROPS is a Qualifying Recognised Overseas Pension Scheme that meets criteria set by Her Majesty’s Revenue and Customs (HMRC) and is recognised by HMRC.  Any QROPS can accept transfers from a UK registered pension scheme.

Who is it for?

They were originally for those living overseas, or those planning to move overseas ie. retire abroad.  However, UK residents can also benefit from the lower administration charges generally available with a QROPS.  They can also offer the same benefits as a UK SIPP for UK residents, but with additional benefits, for example, there is no need to purchase an annuity or pay the UK tax charge on death.

Like SIPPs, a QROPS is not suitable for everyone and so independent financial advice is essential.

What are the benefits of a QROPS?

  • No need to purchase an annuity at age 75 or pay UK tax charge on death
  • Leave all unused pension funds to your beneficiaries free of IHT thus avoiding up to 82% tax charge
  • Maximum /minimum income limits are much higher/lower than a UK scheme
  • Much greater investment freedom
  • Tax free lump sum
  • Total diversification – onshore / offshore funds
  • Take income from your pension in a much more tax efficient way
  • Tax income and benefits in currency of your choice
  • Protection against possible future creditors (dependent on QROPS jurisdiction)
  • Greater confidentiality

As with all retirement plans, it is crucial that you seek pensions advice from an independent financial adviser.  However, as these are unusual plans an adviser experienced in this area is sensible.  By producing a financial plan, they will be able to tell you if this is the correct form of pension for you.  They should also be able to offer you extra tax help or tax advice to make the most of any scheme you choose to undertake.  The investment advice you obtain should take into account your existing investment portfolio.

Any questions about QROPS?

If you are part of the millionaire asset group or a small business owner, this is an important area for you to consider fully and a financial planner will be able to help you.  If you have any questions, please call us on 01582 839280 or Email us.