The research has stated that 7,300 UK to overseas pension transfers were completed in that 2 year period.

One of the reasons for the popularity of QROPS is the potential flexibility of the overseas scheme once the member has been a non-UK tax resident (and continues to be non-UK tax resident) for 5 complete UK tax years.

The main concern for UK SIPP providers, when trying to compete with QROPS, is the death benefits once a client is in Unsecured Pension (USP), which is pension income drawdown pre age 75, or in Alternatively Secured Pension (ASP), which is pension income drawdown post age 75.

For a client in a UK SIPP in USP, on death 35% tax is applied to any remaining fund paid to a beneficiary as a lump sum. On death in ASP, if a lump sum is paid to a beneficiary, a combined tax and unauthorised payment charge of 81% on the lump sum could occur.

For UK expat pension members living abroad and looking to draw on their UK benefits, a transfer to a QROPS, depending on the jurisdiction, could lead to a greater lump sum death benefit being paid to beneficiaries (after the 5 year reporting period) then if the client remained in a SIPP – as a QROPS potentially would not have the UK tax charges.

This is one aspect that has lead to increased popularity, for retirees abroad, of QROPS over SIPPs.

The Popularity of QROPS is a post from: Global Qrops