Posts Tagged ‘QROPS ADVICE’

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QROPS and the Proposed UK Annuity Changes

Saturday, August 28th, 2010

As a result of the Emergency Budget, on the 22nd June 2010, the UK Treasury published a consultation document with the proposals for the abolition of compulsory annuities and the new drawdown rules (effective from 2011/12 onwards).

These proposals are very interesting for those people looking to transfer their UK pensions to QROPS (Qualifying Recognized Overseas Pension Schemes).

The new proposals look to remove the requirement to purchase an annuity from a UK scheme, abolish ASP (Alternatively Secure Pension) and introduce two types of drawdown – all affective from 6th April 2011.
All these changes add additional considerations for potential QROPS transfers.

As with all changes to UK pension legislation, QROPS trustees have to be aware because their schemes have to follow the UK rules, and report any payments made to the member, for the first 5 complete UK tax years of a member’s overseas tax residency (known as the QROPS reporting period). Generally speaking, the methods and amounts that can be paid from a QROPS, within the reporting period, have to be broadly in line with what UK schemes permit.

The consultation paper asks for views from the industry (and interested parties). These views will be expressed until 10 September 2010.

Global QROPS Ltd will explain ‘Capped’ and ‘Flexible’ drawdown in later news items.

In the meantime, the pension commencement lump sum will still be tax free, with pensions in payment taxed as income (from UK schemes) – this has not changed in the proposals – and benefits will still be tested against the Lifetime Allowance at the normal Benefit Crystallization Events (BCE’s), such as on transfer to QROPS.

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Latest HMRC QROPS list

Tuesday, January 26th, 2010

On 15th December 2009, the UK’s Her Majesty’s Revenue and Customs (HMRC) updated on their website the latest updated list of QROPS (Qualifying Recognized Overseas Pension Schemes). The update is published by the PSS (Pension Scheme Services).
As with previous updates of the QROPS list, this is not a definitive list. In other words, there are QROPS schemes that have been approved by HMRC that have chosen not to appear on the list.
More importantly for those individuals looking for QROPS advice, they should not look at that list and assume that it is a recommendation by HMRC to use any of the QROPS stated. HMRC have emphasized that the publication of the list is for information purposes only and that they are not responsible for any overseas pension transfer from a UK scheme to an overseas scheme based on the clients choice of the scheme coming from the list.
As mentioned in previous news updates by Global QROPS Ltd, there are a number of schemes that feature on the list, as QROPS, but are actually unable to receive transfers in because their local rules do not allow this. An example for this is the USA – IRAs (individual retirement arrangements) and 401K’s are not permitted to take UK pension transfers in under USA legislation – despite appearing on the QROPS list.
It is also worth noting, that there are schemes that have been approved by HMRC but may have obtained their approval with incorrect information.
Please find link to HMRC latest news page. Latest QROPS list under 15th December: http://www.hmrc.gov.uk/NEWS/INDEX.HTM

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UK Pre Budget Report 2009 – Tax Changes Affecting Annual Allowance

Sunday, January 17th, 2010

There are many circumstances, when a potential UK migrant is looking to transfer their UK pension funds to QROPS (Qualifying Recognized Overseas Pension Schemes) where it may be beneficial to boost their UK pension funds by making contributions first.

This would not only increase the transfer value, by the amount of contribution, but there is tax relief available on the contributions too.
Pre Budget Report Announcement Affecting Potential QROPS Clients

Already, for high earners looking to make fully tax relievable pension contributions, to a UK pension scheme, the new rules that were introduced in the Finance Act 2009 have a limiting affect on the amount that can be contributed above £20,000 per annum that would receive higher rate tax relief.

From April 2011, those with income of £180,000 and above would only receive basic rate tax relief on pension contributions. Those with income between £150,000 and £180,000 would get tax relief somewhere between basic rate and higher rate on a sliding scale.

However, the Pre Budget report has determined that the definition of relevant income (used in determining whether an individual is affected by these changes) will include employer pension contributions therefore affecting those with incomes of £130,000 per annum upwards (rather than from £150,000 upwards).

(However, the Government has said that those with incomes of £130,000 or less before the  inclusion of employer pension contributions will not be affected).

High earners looking for QROPS advice should, therefore, speak to UK QROPS advice specialists (such as Global QROPS Ltd) before making decisions on increased contributions to UK pensions.

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QROPS Advice from Experienced UK Authorized and Regulated Advisers

Tuesday, January 5th, 2010

When taking financial advice, in all aspects of financial planning, individuals generally feel more comfortable with advisers who are experienced, authorized and regulated. This is no different for people who are seeking advice on QROPS (Qualifying Recognized Overseas Pension Schemes).

 QROPS have been an essential part of retirement planning, especially for people who are migrating, since 6th April 2006 – when they first came into effect.

QROPS are essentially overseas pension schemes that are approved by the UK’s Her Majesty’s Revenue and Customs (HMRC) for receiving UK pension transfer funds. The Global QROPS Ltd advisory team have been advising on UK pension transfers to overseas schemes since before QROPS were first introduced, in the Finance Act 2004, and have been advising clients and assisting other financial advisers on QROPS from their launch to the present.

Global QROPS Ltd was established with the specific purposes of providing QROPS advice and our launch has been covered in the international financial press:  http://issues.lastwordmedia.com/1N4a71b86ba6a89012.cde/page/8

 Global QROPS Ltd are based in the UK and authorized and regulated by the UK financial services authority (FSA).

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Transfers to QROPS and the Pension Special Allowance Rules

Saturday, December 19th, 2009

Many of Global QROPS Ltd’s clients, that fall into the high earner category, look to maximize the funding in the their UK pension before they migrate and potentially transfer those funds to a QROPS (Qualifying Recognized Overseas Pension Scheme).

Before a change in the rules, introduced in the Finance Act 2009, a high earner could contribute up to their earnings into a UK pension scheme, subject to the annual allowance (£245,000 in tax year 2009/10), and receive full tax relief on the contributions. However, a temporary measure introduced by the Finance Act 2009 placed a restriction on the amount that could be contributed.

What changes do Global QROPS Ltd’s clients, that are high earners, need to be aware of?

The temporary measure (mentioned above) is the ‘pension special annual allowance’ and is a tax allowance that restricts the tax breaks on UK pension contributions for high income individuals with relevant income of £150,000 a year and over. This temporary measure commenced on 22nd April 20009 and is expected to be in place until 5th April 2011 – at which point the Government intends to finalize the rules.

The basic allowance is set at £20,000 (although an individual may qualify for an enhanced allowance of up to £30,000). Should a high income individual contribute in excess of the pension special allowance, then a tax charge on the individual would be generated.

High earning individuals, looking to top-up their UK pensions before transferring to a QROPS, should be aware of the potential restrictions.

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Global QROPS Ltd working with UK IFA’s regarding QROPS advice options

Thursday, November 5th, 2009

Global QROPS Ltd, UK specialists in overseas pension transfers, are working alongside UK Independent Financial Advisers (IFA’s) throughout the UK, regarding client’s Qualifying Recognized Overseas Pension Scheme (QROPS) advice options.
From the introduction of the QROPS legislation in April 2006, UK IFA’s with migrating clients have been able to add the QROPS advice option to the other retirement options available. Although this would be a valuable choice for a migrating client, it can be both a time consuming and complicated option for a UK IFA to fully research.
The team at Global QROPS Ltd have specialized in transferring UK pensions overseas for many years and as a result understand that migrating clients are in different types of UK pension schemes, have various sizes of funds and migrate to a choice of countries (with their own tax rules) throughout the globe. As UK based IFA’s (authorized and registered with the FSA) Global QROPS Ltd also understands that there are the essential ‘know your client’ facts to establish too, such as their aims, goals and long-term retirement plans.
There are many QROPS providers that are based in different jurisdictions that may (or may not) suit a client for tax, investment or retirement purposes. Finding a QROPS that can suit each migrating client’s unique circumstances is not always straightforward. Global QROPS Ltd have the experience to provide solutions.
As a result, Global QROPS Ltd are setting up agreements with UK IFA’s to assist specifically with the QROPS advice option for the UK IFA’s migrating clients.

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Who should I ask for QROPS advice?

Monday, September 21st, 2009

For a UK pension member, looking at a pension transfer overseas, the phrase Qualifying Recognized Overseas Pensions Schemes or ‘QROPS’ would be something that they would sooner or later come across. The first question that is then raised is:

‘Who should I ask for QROPS advice?’

The ideal people to ask are specialist QROPS advisers, such as Global QROPS Ltd, who have a team of advisers that have been advising on QROPS since their inception on 6th April 2006.  If you do not know how to get hold of QROPS specialists, your first port of call should be your IFA or financial adviser, who would be able to steer you in the right direction.

‘Why don’t I just approach a QROPS provider directly?’

There is nothing to stop a UK pension member, who is looking at a pension transfer overseas, speaking to a QROPS provider directly. However, with so many QROPS providers in various different countries (some suitable from an individual’s tax perspective and some not), unless you are confident that you are aware of everything that is available to you, it is difficult to know whether you are approaching the most suitable providers in the first place. In addition, QROPS providers are generally not advisers. Other than giving information on their own QROPS product and capabilities, they would not necessarily shed any further light on what else is out there.

Global QROPS Ltd are authorised and regulated by the UK financial services authority.

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Will my UK Final Salary Pension Transfer to Australia?

Tuesday, September 15th, 2009

Many clients of Global QROPS Ltd have UK Final Salary Pensions schemes and ask our advisers, will a Final Salary (Defined Benefits) scheme transfer to Australia? Providing the receiving scheme in Australia is registered and approved as a Qualifying Recognised Overseas Pension Scheme (QROPS), a transfer can take place, however, the more appropriate question should be ‘would I benefit from a UK final salary pension transfer to Australia?’.

Australian Superannuation schemes work on a very different basis to UK Final Salary schemes. Australian Superannuation schemes are set up on Money Purchase (Defined Contribution) basis and thus there is no like for like equivalent of a UK final salary scheme.

Whether you are considering a UK final salary pension transfer to Australia, or to any other UK pension or QROPS scheme, an individual has to be aware of the benefits they are giving up from their original scheme. With a UK final salary scheme, the responsibility and the cost to provide a pension member with retirement benefits lies with the employer (or former employer). By transferring out of such a scheme into a money purchase environment, an individual is placing the responsibility on themselves and the new scheme to provide adequate benefits for their retirement.

It is vitally important, therefore, that an individual establishes that they have received a fair transfer value from the trustees of their final salary scheme before they even consider a transfer out. Global QROPS Ltd can provide impartial advice and transfer analysis calculations for anyone considering a UK final salary pension transfer to Australia.

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Qualifying Recognised Overseas Pensions Schemes (QROPS) – Why’s and Wherefores

Monday, August 17th, 2009

With Qualifying Recognized Overseas Pensions Schemes (QROPS) becoming an increasingly important topic, both the UK IFA and their clients are looking for guidance and information on how QROPS work and their suitability.

 Members of the Global QROPS Ltd team have been at the forefront of advice on the transfer of overseas pensions for many years and have been experts on QROPS since their inception on A-day (6th April 2006).

Global QROPS Ltd are looking to work alongside UK IFA’s to ensure that their migrating clients receive the best overseas pension transfer options.

The expertise that Global QROPS Ltd provide has been used by IFA online in the article QROPS. Why’s and Wherefores. Written by Global QROPS Ltd director, Paul Davies, the article examines some of the issues that a UK IFA (and their client) would need to consider.

http://www.ifaonline.co.uk/retirement-planner/feature/1356395/qrops-whys-wherefores

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Reasons for QROPS Advice

Monday, August 3rd, 2009

There are many reasons as to why and individual would consider transferring the their pensions from the UK to a Qualifying Recognized Overseas Pension Scheme (QROPS).
For an individual moving abroad, there could be more options available, with their pension benefits, then if they remained in the UK.
For many the UK pension regulations are too restrictive, however, not all overseas pensions have unlimited options and access to benefits.
In order to understand the options available and the best scheme that they could be obtained, it would be prudent for a UK pension member to seek QROPS advice.
There are almost 1,800 schemes currently registered as QROPS on Her Majesty’s Revenue and Customs (HMRC) website. There are also schemes registered and approved as QROPS that do not appear on the list.
Not all of these schemes are available for everyone to use and many of those available may not be suitable.
Some factors that someone, giving QROPS advice, may have to be consider when selecting an appropriate product are:

• Individual’s plans for retirement;
• Whether the individual has beneficiaries
• Individual’s risk profile;
• Investment options in the scheme;
• The exchange rate on transfer;
• The tax regime in the country that the individual has migrated to;
• Tax rules in the country that the QROPS is based;
• Is the QROPS in a jurisdiction under investigation from HMRC?
• Transfer options from the QROPS. Can funds be transferred out?

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