What are QROPS?

A QROPS is a Qualifying Recognised Overseas Pension Scheme, which has been approved by Her Majesty´s Revenue & Customs (HMRC) to accept a pension transfer from a UK pension scheme. They offer enormous financial benefits for the thousands upon thousands of ex-pats now living or planning to live out their retirement abroad.

This ability to transfer a pension from the UK to another country was brought into action on 6th April 2006, dubbed ‘A-Day’, when massive reforms swept through personal and work pensions in the UK. Under these changes people no longer resident in the UK, but who had UK pensions, were allowed to transfer their pensions across to a QROPS, provided they met certain conditions.

To be classified as a QROPS the overseas scheme must meet certain requirements. These are linked to the operating jurisdiction of the QROPS and include how and when benefits are payable and membership eligibility.

Although a QROPS must be registered with HMRC, the ongoing running of the QROPS and its compliance with HMRC rules is the responsibility of the QROPS Trustees. HMRC publish a list of QROPS on their website, although not every scheme chooses to be on that list.

A QROPS can have significant taxation and investment advantages to individuals with UK pension rights who have, or will become non-resident in the UK for tax purposes. Most UK Pension Schemes can be transferred to a QROPS including ‘protected rights’. The exceptions are typically State Pensions and most Final Salary Schemes already in payment.

To find out whether your pension is suitable for a QROPS, a specialist QROPS adviser can advise you on your individual situation and help determine which offshore pension providers would be best for you. The benefits are many and varied but include being able to draw a tax free lump sum of 30 percent, no obligation to purchase an annuity at 75 years of age, greater investment flexibility and avoidance of crippling UK inheritance tax.

Visit our dedicated page on QROPS FAQ’s for further information.

Alternatively, for further information on QROPS transfers &equally important QROPS rules, just fill in your details in the ‘Request more Info’ section on the site for a QROPS adviser to contact you.