Posts Tagged ‘QROPS Pension’

QROPS Specialists Work Alongside UK Financial Advisers

Saturday, September 18th, 2010

QROPS (Qualifying Recognized Overseas Pensions Schemes) and latterly QNUPS (Qualifying Non UK Pension Schemes) are an important retirement planning tool for UK Independent Financial Advisers (IFAs) for their clients who are looking to migrate or, indeed, have already moved abroad. Clients themselves are becoming increasingly aware of the opportunities that QROPS provide.

Global QROPS Ltd work alongside UK IFA’s to ensure that the IFA’s offshore and potentially migrating clients are provided with the best advice.

Global QROPS Ltd are often approached by UK IFA’s to assist them regarding QROPS advice and subsequent transfer. Typically a UK IFA may have a gap in their knowledge, when it comes to this specialist area, or would be restricted by their compliance department when it comes to advising on QROPS.

Since the inception of QROPS on A-day (6th April 2006), the advisers of Global QROPS Ltd team have been at the forefront of transferring UK pensions overseas. Our team of advisers work alongside UK IFA’s ensuring that their client receives the best advice and that the introducing IFA is remunerated in the appropriate way.

Once again, Global QROPS LTD has been quoted in the financial journal, Money Marketing stating their position in the IFA market (please see the link):

http://www.moneymarketing.co.uk/offshore/aes-intl-calls-in-specialist-to-mitigate-qrops-risks/1018075.article

Global QROPS Ltd are UK based financial advisers, authorised and regulated by the Financial Services Authority (FSA).

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QROPS, the Proposed Annuity Changes and UK Drawdown

Wednesday, September 15th, 2010

Following Global QROPS Ltd’s news item, posted on our website on 28th August 2010, regarding the proposed annuity changes featured in the UK Treasury’s consultation document – published as a result of the UK Emergency Budget on 22nd June 2010 – this Global QROPS Ltd news item has been composed to further clarify the terms ‘capped’ and ‘flexible’ drawdown.

With effect from 6th April 2010, according to the recently drafted consultation paper, the UK government are looking to abolish compulsory annuity and alternatively secured pension. Abbreviated to ASP, alternatively secured pension is effectively ‘drawdown’ directly from a member’s pension fund – for pension members aged 75 or over.

Currently, prior to age 75, a member of a UK pension or a QROPS, has the option of USP (unsecured pension) which is drawdown pre age 75. USP allows income on the basis of zero to 120% of the GAD (Government Actuary Department) limit until age 75, when the less flexible ASP rules apply.
As Global QROPS Ltd understands, the proposals state that there are two types of drawdown to become available: ‘capped’ and ‘flexible’ drawdown.

Capped drawdown will be on the same basis as USP, but with the ability to continue past age 75 – although the upper limit of 120% GAD will be reviewed to see if it is still a realistic rate to use.

Flexible drawdown will allow an individual to draw an unlimited amount from their fund, with the proviso that the member can demonstrate that they have secured a sufficient minimum income to prevent them from falling back onto the State. The method of assessing this income (known as the Minimum Income Requirement) has not yet been decided.

It is important that people looking to transfer to QROPS (especially those within the QROPS reporting period) are aware of the rules as the levels of income that they take from the QROPS could be affected by this.
For further information, please speak to an adviser at Global QROPS Ltd.

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QROPS and QNUPS

Wednesday, September 8th, 2010

As most people, looking to affect a pension transfer overseas from their UK scheme will be aware, a transfer can only take place if the receiving scheme is a Qualifying Recognized Overseas Pensions Scheme (QROPS). QROPS came into effect with the introduction of Pensions Simplification in the UK. The QROPS legislation was set down in the Finance Act 2004 and in Statutory Instrument 2006/206.

On ‘A-Day’ (6th April 2006), UK Pensions Simplification was launched and with it QROPS.

Although the QROPS legislation addressed many points, such as permitted retirement levels, tax free cash levels, overseas scheme criteria and QROPS reporting requirements – the QROPS rules did not cover the UK IHT (inheritance tax) situation with funds held in overseas schemes. In other words UK pension funds, transferred to an overseas scheme (approved as a QROPS), could be subject to the UK’s IHT rules.
On 15th February 2010, Statutory Instrument 2010/051 – The Inheritance Tax (Qualifying Non-UK Pension Schemes) Regulations 2010 – was introduced to confirm that UK pension funds, transferred in to an overseas scheme, would not be subject to IHT. Furthermore, these rules were backdated to 6th April 2006.
As a result, all QROPS can be considered QNUPS (Qualifying Non-UK Pension Schemes) for UK IHT purposes. However an overseas scheme can meet the QNUPS criteria without being a QROPS.
Although a QNUPS (that is not a QROPS) can not receive transfers in from approved UK schemes, it can provide IHT planning opportunities.
The article attached, from leading UK overseas pension transfer specialists Global QROPS Ltd, explains the introduction of QNUPS:
http://www.moneymarketing.co.uk/channels/retirement-strategy/a-question-of-qnups/1011270.article

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QROPS Providers to become Multi-Jurisdictional

Friday, September 3rd, 2010

QROPS (Qualifying Recognized Overseas Pension Schemes) has increasingly become an excellent commercial opportunity for many overseas trust and pension companies, since the QROPS legislation was introduced by the UK’s HMRC (Her Majesty’s Revenue and Customs) on 6th April 2006.

Since the inception of QROPS, many providers have emerged in countries and jurisdictions such as Guernsey, Isle of Man, Gibraltar, New Zealand and Malta (to name but a few).

Reputable QROPS advisers, such as Global QROPS Ltd, will advise on an appropriate QROPS in a jurisdiction to match their client’s circumstances, as each jurisdiction has their own particular rules and benefits (which apply after the member has been non-UK tax resident for 5 complete UK tax years).

As well as having benefits, many QROPS providers, however, have their own restrictions too – this is usually attributed to the local tax rules or pension regulations in their own country or territory.

To counteract this, QROPS providers are looking at the possibility of setting up a trust outside of their own jurisdiction or even annexing their product with another scheme in an alternative jurisdiction, with the result of offering the customer a full range of retirement options.

Leading QROPS advisers, Global QROPS Ltd, have once again commented on this in leading financial journal, Money Marketing. Please see the link to this:

http://www.moneymarketing.co.uk/pensions/guernsey-qrops-plans-new-zealand-scheme/1011242.article

Please contact Global QROPS Ltd with any questions on transfers to appropriate QROPS.

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QROPS and Important UK Drawdown Clarification

Tuesday, August 31st, 2010

The major problems for members of UK pension schemes, between the ages of 50 and 55, in UK drawdown, who were looking to transfer to QROPS post 6th April 2010, could have been resolved by HMRC in their July pension’s policy document.

The problem came when the retirement age for members of UK pension schemes and members of QROPS (who are within the 5 year QROPS reporting period) increased from age 50 to 55, on 6th April 2010.
As the rules stood, there was a restriction for those who had taken pension benefits through USP (unsecured pension – previously referred to as drawdown) prior to 6 April 2010, when over age 50 but under 55. As long as the USP payments continued to come from the member’s original scheme, as pre 6th April 2010, there was no issue. However, if a UK pension member in USP (between the ages of 50 or 55) was to transfer to another UK pension arrangement or QROPS (for example) the problem arose that HMRC indicated that further income payment from the new scheme would be classed as an unauthorized payment.
The latest HMRC document on this matter states that regulations will be brought in to allow transfers from USP to USP (drawdown to drawdown) to continue without the member incurring the HMRC unauthorized payments charge on any income taken.

This is both a logical step and good news for people whose UK pension is in USP, that are in between the age of 50 to 55, who are looking to transfer to QROPS, even if they are within the QROPS reporting period. Any continuing payments from the new scheme should not be subject to an HMRC charge.

Anyone in USP (or drawdown) looking to transfer to QROPS, should seek specialist QROPS advice from an expert QROPS adviser, such as Global QROPS Ltd, to ensure the process runs smoothly.

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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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Transfer delays for members’ of public sector pension schemes

Thursday, August 5th, 2010

Members’ of Public sector pension schemes wishing to transfer to QROPS and to other UK registered schemes, are currently unable to request transfer value quotation following a Government decision to link final salary pensions to the Consumer Prices Index.

The Chancellor George Osborne announced in the emergency Budget that the indexation applied to public sector pensions would change from the Retail Prices Index to CPI. The implementation date has not yet been confirmed but it is anticipated that guidance should be published within then next few months.
Over time CPI is generally 0.5% lower than RPI mainly because it does not include housing costs. As such, the change is likely to reduce government pension liabilities but is likely to result in lower transfer values for members’.

Individuals in receipt of a guaranteed transfer value for public sector schemes, wishing to transfer to a QROPS, should act swiftly before the guarantee period expires.

Once Public Sector schemes have received guidance from Treasury on how to apply CPI we are expecting long delays while the schemes deal with the backlog of transfer value requests that have accumulated during the transfer embargo.

If you are a member of a public sector pension please do not hesitate to contact Global QROPS for further advice.

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