QROPS seems to be the latest “in word” amongst ex-pats. But what does it all mean we ask? Well, let’s start at the beginning, with a simple explanation! QROPS means “Qualified Recognised Overseas Pension Scheme”. Basically, HMRC have devised a scheme by which UK ex-pats can get their UK pensions transferred to their new place of residence.
HMRC has a set of criteria which foreign pension schemes must meet before they are accepted as qualified and recognised. If you decide to opt for a scheme that is not qualified and recognised you could be opting for some very heavy tax penalties – Depending on the scheme this might be as high as fifty-five percent! The simple point of this? That is a big chunk of your pension pot down the drain, which is definitely something you need to be aware of.
Get Some Help
With the world barriers not being what they used to be, more people than ever are taking up residence elsewhere in the world. To get in line with this adjustment the UK HMRC have created QROPS. Pensions have and probably always will be somewhat complicated. With the complexities of foreign politics, economics and taxes thrown in you are going to need some professional help. The best way to do this is get in touch with a reputable QROPS advisor and/or help centre.
If They are Not on the List….
The HMRC is consistently checking which schemes are qualified and regularly update a list of countries with QROPS on their website. If they are not meeting criteria one of the most usual reasons for that is the pension is not meeting “at least” the same standards as the UK with regards to protecting your interests (consumer rights). Pension schemes on the list are also required to inform HMRC if there are changes which could affect them from being qualified.
Not all QROPS are the Same
There are more than three thousand QROPS available in 2018 so making a choice can be a tad tricky! A professional advisor can help you make the right choice for your particular circumstances. Fees vary as well as tax concessions. There are many variables with regards to how much tax you pay, fees, inheritance and more. Without question, it is very important to get professional advice if you are considering QROPS.
Are QROPS The Right Choice for You?
While QROPS are certainly the right foot forward for many UK ex-pats, this is not true for everyone. In reality, there are only two “real” choices: 1) Leave your pension where it is, in the UK 2) Transfer your UK pension into a QROPS. Of course, there are non qualified pension schemes available worldwide but these are extremely risky.
Most people want to be able to enjoy their retirement by ensuring they are financially stable. QROPS can provide that. While it is complicated par-Se, there are major benefits to be had by making that transfer. Contact a qualified advisor who can give you the simple explanation to what is, in reality a complicated matter. They have the knowledge and experience it takes to help you make the right decision.