Pensions that have accumulated during your time working in the UK could now be potentially moved to a more detailed solution. The two main areas we advise are QROPS (Qualifying Recognised Overseas Pension Schemes) or SIPPS (Self Invested Personal Pensions Schemes).

These are ideal for people that have left the UK, and have no intention of returning to the UK. A QROPS is a pension scheme that it is allowed by HMRC to be transferred to a foreign scheme. To qualify, the pension must meet certain criteria and be registered by the HMRC.

QROPS have risen in popularity since the new UK pension regulations came into force in April 2006, but they are a complicated financial product needing specialist advice. Here at IIMG, we are able to offer you clear guidance on the best way to deal with QROPS and how to proceed with one.

We have put together a few commonly-asked questions and their answers to help you decide if a QROPS is for you.

Can I Transfer into any Overseas Scheme?

Overseas schemes must meet HMRC’s strict guidelines in order to qualify. Most schemes that do are registered on HMRC’s website. That does not, however, guarantee approval as HMRC reserves the right to withdraw approval at any time. It is best to talk to us first, so we can research whether your scheme will qualify.

Can all British Pensions be transferred into a QROPS?

Most British pension schemes qualify, including deferred pensions, pensions in drawdown and protected rights pensions. Final salary schemes currently in payment, the state pension or annuities do not qualify for transfer.

How can QROPS Help Avoid Currency Risk on Your Pension?

Your pension can be paid out in any currency once transferred. This helps reduce currency risk if you get your pension paid in the currency you use in everyday life.

Do You Have to Buy an Annuity with a QROPS?

No. Unlike in the UK, you do not have to buy an annuity. Your remaining fund will still be paid out to your spouse when you pass away provided you have been a non-UK resident for at least five-years. The funds will also be free of UK death taxes, which can be as high as 82%.

What are the Income Tax Benefits?

This depends on where you move to. For example, if you live in country where you can be paid the gross figure from your QROPS, then you can take it as a gross amount. You may be liable to pay tax in the country where you reside though, which, in many cases, may be less than you would pay at home.

Are there any Local Tax Issues?

Again, this depends on individual countries. We can advise you on the local tax laws governing your QROPS so you fully understand the situation before proceeding.