Pension products explained: QROPS

Can provide significant tax advantages and more flexibility if your plan is to continue to work and retire offshore and never return to the UK.

What are QROPS?

Since 6th April 2006, there has been a standardised way for those permanently leaving the UK of transferring preserved pension benefits accrued in the UK to another country.
Since then, over 1700 different schemes have registered as QROPS with HMRC in over 40 different countries.

They are designed to allow a transfer of benefits from the UK to another jurisdiction, which may or may not be your new country of residence. Chosen correctly, this can provide significant taxation advantages and flexibility.

Which jurisdiction the policy should be placed in will depend on your individual circumstances including your intended country of residence on your retirement. This can have a significant affect on the taxation position of investments and benefits taken from the plan on retirement. However, generally, in most cases we would consider Guernsey to be our preferred choice of jurisdiction.

Why Guernsey?
It is internationally recognised as being one of the world’s premier financial centers and is highly regulated with very close links to the UK regulators and authorities.
There is no local taxation on benefits taken from the policy for non Guernsey residents. This means that proceeds of the plan would be paid gross on retirement or death, with no local income or inheritance tax payable. However, you may be subject to taxation in your country of residence. Depending on your personal circumstances, this could therefore save you up to 50% income tax and 35% inheritance tax.

Our QROPS package offers significant potential benefits including;

1. No requirement to purchase an annuity with an insurance company on retirement
2. Income paid gross so not subject to taxation at source in the jurisdiction as long as non-resident
3. Ability to draw income at any time whilst moving to a much more advantageous position on death and saving Inheritance Tax in certain circumstances.
4. Tax advantages and guarantees provided by offshore investments, whilst remaining under the comfort of the UK regulatory framework
5. Very flexible contract where most investments can be made
6. Flexible way of taking benefits with many options to suit the individual circumstances of both you and your dependants’
7. Ownership of your pension fund prevents the potential of existing employer scheme underfunding
8. Consolidation of all existing arrangements into one policy, plus the ability to make additional non pension contributions
9. Highly experienced investment management team
10. Regular reviews on your investments and changes in your personal circumstances