As with all previous updates with the QROPS list, this is not a completely definitive list. There may be several QROPS (Qualifying Recognized Overseas Pension Schemes) available that have chosen not to be on the list.

More important to note, however, is the fact that there may be QROPS on the list that are about to lose their approval or have, prior to the list being published, lost their approval already.

At the time that this appears in Global QROPS Ltd’s latest news items, Global QROPS Ltd are aware that there is a scheme in Hong Kong that appears on HMRC’s QROPS list that has lost it’s approval. HMRC may well amend the list in due course but it is worth reminding those looking to transfer their UK pension overseas, that the QROPS list is not a definitive guide as to what is and is not available and that specialist advice should be sort.

In addition there may be QROPS detailed on the list, that are unable to accept pension transfers in from non-resident members (such as Australian QROPS and Jersey QROPS, for example) and there may be schemes, such as USA QROPS, that have been approved by HMRC as QROPS but do not allow transfers in to their schemes under their own local rules.

For the latest QROPS list, please see the attached link.

http://www.hmrc.gov.uk/pensionschemes/qrops.pdf

UK’s HMRC’s Latest QROPS List is a post from: Global Qrops

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.

QROPS, the Proposed Annuity Changes and UK Drawdown is a post from: Global Qrops

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.

QROPS and the Proposed UK Annuity Changes is a post from: Global Qrops

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.

Transfer delays for members’ of public sector pension schemes is a post from: Global Qrops

For full details of the HMRC update see link: http://www.hmrc.gov.uk/NEWS/INDEX.HTM

If an individual does want to complete a UK pension transfer to Australia, they may be tempted to look at the list and work from there. However, HMRC stress that the QROPS list is not a recommendation or advertisement for any particular scheme, it is merely for information purposes for an individual to check that an Australian QROPS that they have received professional QROPS advice on is indeed approved.

Global QROPS Ltd advise many people migrating to Australia on their pension options. It is not, in all circumstances, best advice to transfer pensions to Australia and people need to be aware of all of the advantages and disadvantage before making a decision.

Many of the Australian QROPS on the HMRC list are either Australian employer’s pension schemes or Self Managed Super Funds (SMSF). These schemes may be available for an employee of a company or to an individual that has set up a SMSF but someone looking down the QROPS list could not simply pick out a scheme and apply to become a member.

For advice on a UK pension transfer to Australia, speak to an adviser at Global QROPS Ltd.

A UK Pension Transfer to Australia – The latest HMRC QROPS list is a post from: Global Qrops

Latest HMRC QROPS list is a post from: Global Qrops

Global QROPS Ltd will explain the impact to UK occupational pension scheme members in this position and if there is any QROPS advice that may be affected by this.

What is a Short Service Refund?

Lump sums paid to members who leave an occupational pension schemes within 2 years of joining (known as short service refund lump sums), are permitted by the UK’s HMRC (Her Majesty’s Revenue and Customs) in order to ease the administrative burden for a scheme and reduce the cost of providing an extremely small pension for life for a member.

 The pre Budget Report declared that changes are being made to take into consideration the new 50% upper rate of income tax – coming into force from April 2011.

Short service refund lump sums, made on or after 6 April 2010, will now be taxed at a rate of 20% on the first £20,000 of the refund and 50% on the remainder. (Previously this was 20% on the first £10,800 and 40% on the amount above this).

For potential migrants, taking QROPS advice, there may be little option but to take the refund. Occupational scheme administrators will not always provide a transfer value for members with less than 2 years membership and therefore a transfer to QROPS may not be an option.

Changes to Tax on Short Service Refunds for UK Occupational Pension Members is a post from: Global Qrops

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.

UK Pre Budget Report 2009 – Tax Changes Affecting Annual Allowance is a post from: Global Qrops

For many UK expat pension members, pension funds are often left in the UK because of the nature of the investment within the pension scheme. For example, UK Small Self Administered Schemes (SSASs) and UK Self Invested Personal Pension Plans (SIPPS) can have more diverse investments than a UK personal pension or standard employer’s scheme could have.

It would not be uncommon for a SSAS or a SIPP to have commercial property or shareholdings as an investment within the scheme. UK expat pension members with these types of schemes and investments may be deterred from transferring out of their UK scheme to a QROPS because it may require the investment to be cashed in first and, with the property or equity market at a low, this could lead to an overall loss for the fund.

What is an in-specie transfer to a QROPS?

In-specie transfers could be an alternative solution to divesting a pension investment in order to affect a transfer. Under this method, assets are transferred directly from one pension scheme to another. This means that any legal ownership of the assets, such as property, can be transferred from the transferring pension scheme to the receiving pension scheme.

Theoretically, at least, the same principle can apply for transfers from UK pension schemes to QROPS – however, additional points need to be considered. 

As you would be dealing with a different jurisdiction for QROPS, would that particular regime allow investments such as property or shares? Furthermore, would those types of investments receive the same tax breaks in overseas schemes as they would in the UK?

Global QROPS Ltd can provide advice and guidance on QROPS matters.

QROPS and In-specie Transfers is a post from: Global Qrops

Since the Defined Contribution regime was introduced in the Finance Act 2000, an individual could make a UK pension contribution, on behalf of another individual, from 6th April 2001. These were known as Third Party contributions.

Also introduced in 2001 was the removal of the minimum age that an individual needed to be to become a member of a UK personal pension (or stakeholder).

Often taking advantage of these rules were grandparents or parents looking to make a contribution on behalf of a child. As a result, since 2001, there are many minors who have accrued pension funds.

It is often the case, that when a family migrates, all family members (including the children) would have accrued pension funds in the UK. Therefore, when Global QROPS Ltd are asked to advise about UK pension transfers to QROPS, the question arises about whether a child’s pension plan can transfer to a QROPS?

Theoretically, the answer to this question is ‘yes’. Her Majesty’s Revenue and Customs (HMRC) have not applied any restrictions on such a transfer (providing the receiving scheme is QROPS). However, there are plenty of considerations first.

For example, do overseas pension schemes have their own minimum age restrictions for pension membership? Is there value for the UK fund in being transferred to a QROPS (now or in the future)? – The answer to this could depend on factors such as the overseas pension scheme charges or the fund size.

Global QROPS Ltd are able to provide advice on all aspects of overseas pension transfers.

Can my Child’s Pension Transfer to a QROPS? is a post from: Global Qrops