Factors when Considering QROPS Advice
Planning for the ideal lifestyle in retirement is not easy. For the 130,000 people that migrate from the UK each year, to live abroad, there are additional opportunities and problems to consider.
The main question is whether a migrating UK pension member should move their UK pension benefits with them.
Careful advice should be taken as whether the benefits available from the existing UK scheme are better for the individual as to those available from an overseas scheme.
By obtaining the correct QROPS advice, an individual could obtain that ideal retirement lifestyle.
A QROPS adviser would take into account all the necessary factors and advise accordingly.
The questions that a QROPS adviser would ask could include:
Do you intend to retire abroad?
Will you return to the UK to live at any point?
What type of UK scheme are you currently a member of?
What benefits does your UK scheme currently provide for you?
Does your current scheme levy any additional charges for transferring?
Do you have dependants?
Are there investments in your existing scheme that you would like to retain?
Is there an appropriate QROPS scheme, provided by your new employer, in your new country of residence?
What are the rules for retaining pension investment overseas in your new country of residence?
What level of tax is applied, in your new country of residence, to any pension benefits received?
Only when considering the answer to the above questions can a QROPS adviser deliver the most appropriate QROPS advice.
Archive for July, 2009
Why would you need QROPS Advice?
Friday, July 31st, 2009The Beginning of Qualifying Recognised Overseas Pensions (QROPS)
Wednesday, July 29th, 2009Qualifying Recognized Overseas Pensions Schemes (QROPS) came into effect with the introduction of Pensions Simplification in the UK. Originally set down in the Finance Act 2004, pensions simplification was introduced in order to remove much of the complication the many different regimes were giving the industry.
On 6th April 2006, commonly known in the industry as A-Day, Pensions Simplification was launched and with it Qualifying Recognized Overseas Pensions (QROPS).
The purpose of QROPS was, in order to successfully transfer a UK pension overseas, the responsibility for the migrating individual, to make specific declarations and provide certain documents, was removed and instead the responsibility was placed upon the receiving overseas scheme to register with Her Majesty’s Revenue and Customs (HMRC) as a QROPS. Without that registration and approval of HMRC an overseas pension scheme would not be permitted to accept a transfer in from a UK pension scheme.
The primary objective of the QROPS legislation was for HMRC to be able to monitor the UK pension funds post transfer. Prior to A-Day, the individual did not have to make any declarations to HMRC – other than those required on the day of transfer. As QROPS are required to report back to HMRC, payments made to their members, the UK tax authorities can monitor the situation a lot easier.
International Adviser Article
Monday, July 27th, 2009UK based QROPS advisers, Global QROPS Ltd, have written an article for the International Adviser Magazine about the evolution of Qualifying Recognized Overseas Pension Schemes since their inception to the present date. The article entitled ‘The Changing Face of QROPS’ can be viewed by clicking onto this link: http://www.international-adviser.com/lwm/article/541
What Experience does Global QROPS Offer?
Thursday, July 23rd, 2009Members of the Global QROPS team have been working alongside the UK’s Her Majesty’s Revenue and Customs (HMRC), since prior to the official launch of Qualifying Recognized Overseas Pension Schemes (QROPS) on 6th April 2006.
QROPS came into effect with the introduction of Pensions Simplification in the UK, on A-day, which was 6th April 2006. Members of the Global QROPS team have been regularly talking to HMRC, clarifying points of legislation and offering our own insights as to how the legislation works in practice.
Global QROPS understand fully, the importance of advice to an individual, who is looking to transfer their UK pension funds overseas. Choosing the appropriate QROPS is a crucial element in retirement planning and having that background knowledge in the rules of QROPS, helps Global QROPS piece together the correct advice for an individual.
For many schemes, as well as individuals, the HMRC QROPS rules are a steep learning curve and it is important that the correct procedures are followed by the overseas scheme otherwise members could find themselves subject to UK tax charges. Global QROPS are in a strong position to act as a guide for administrators of schemes that may be unsure of the limits.