Why a QROPS?
If you are a non UK resident or if you are planning to live abroad, there are potential disadvantages with a UK private pension. In the UK, pension benefits tend to die with the member and the fund cannot be passed to beneficiaries. If you are living outside of the UK and have a UK pension, you could still be paying tax at UK rates.
A QROPS pension scheme is an excellent option for people who are living or planning to reside overseas but retain UK pension rights. QROPS benefit from offering excellent flexibility, significant taxation and investment advantages (allowing members to get more out of their pension) and the opportunity to pass on the pension fund to their beneficiaries upon death.
What is a QROPS?
Simply put, a Qualifying Recognised Overseas Pension Scheme, or QROPS, is an overseas pension scheme into which UK pension rights can be transferred. Since 2006, people with UK pensions who are, or will become, non-resident in the UK for tax purposes can move their pension benefits out of the UK to a QROPS. This can prove highly advantageous.
The scheme must meet certain criteria set out by HM Revenue and Customs (HMRC) and act as if it were a UK scheme for QROPS members who have been resident in the UK at any time in the previous five tax years. If you have emigrated from the UK or you are about to do so, and you have transferable pension assets in the UK, then you may be eligible to use a QROPS. We would recommend for your own piece of mind to only work with companies recognised by HMRC. A list of schemes approved by HMRC can be found at HMRC QROPS (www.hmrc.gov.uk/pensionschemes/qrops.pdf)
A list of STM schemes recognised by HMRC are as follows:
- STM Fidecs Centralised Group Pension Scheme – Gibraltar
- STM Fidecs Group Pension Scheme – Gibraltar
- STM Gibraltar Pension Transfer Plan – Gibraltar
- STM Guernsey Retirement Plan – Guernsey
- STM Malta Retirement Plan – Malta
Each jurisdiction has different characteristics so it is important that you talk to an expert that is able to offer you a range of QROPS so that you can be confident you are choosing the right QROPS for your needs.