Offshore QROPS and SIPPS

QROPS - Qualified Registered Overseas Pension Schemes

As from April 2006, British expatriates, or British citizens who plan to move abroad, are allowed to transfer their UK pension funds offshore into a QROPS scheme. The major benefits of such schemes are that:

  • You have much greater investment freedom.
  • You can take income from your pension free of UK tax.
  • There is no need to convert your pension into an annuity at a future date.

SIPPS - Self Invested Personal Pension Scheme

Also a product of the UK pension rationalisation of April 2006, the Self Invested Personal Pension Scheme (SIPPS) allows each investor to manage their own pension investments: when and how they invest the assets of their pension fund.

If you have, or will shortly receive, a UK pension, please contact us for expert advice on all aspects of SIPPS investment.

With our range of funds and financial solutions, we at First Advisory are in a good position to advise you on QROPS and SIPPS, and how best to reallocate your UK pensions funds for tax benefits....

If you are an expatriate, you work abroad, you’re planning on moving overseas or you want to retire abroad, you may well be eligible for a Qualifying Recognised Overseas Pensions Scheme (QROPS). For any expats looking for advice on retirement financial planning, pension fund re-allocation, pension fund investments, offshore investments or general personal wealth / private banking matters - feel free to Contact us:

More Details....

If you’ve never heard of the acronym QROPS before, it stands for Qualifying Recognised Overseas Pensions Scheme, and this is a specific type of pension available and potentially highly beneficial to expatriates and anyone contemplating living or retiring abroad. If that sounds like you or someone you know, read on and the QROPS pension release scheme will be explained.

QROPS are a relatively new invention as far as British expats are concerned. It was only in April 2006 that it was announced that British expatriates could move their pension benefits to QROPS with the UK tax authorities’ approval; since then there has been a slow but steady take up as increasing numbers of people realise the massive and broad benefits available to them by using a Qualifying Recognised Overseas Pensions Scheme…

For British Applicants

In terms of defining QROPS for British applicants, this is a pension scheme set up outside the UK that’s regulated as a pension scheme in the country in which it is established and which must be recognised for tax purposes in the country in which it is established.

In terms of defining QROPS potential benefits for British applicants, the most significant benefits come in to play when the account holder has been non-resident in the UK for at least 5 years and has no intention of returning to Blighty for the foreseeable future. This is because once your pension schemes have been transferred into QROPS and you have been non-resident for at least 5 years, then your QROPS provider is under no obligation to report any actions such as withdrawals or payments to the UK tax authorities.

In addition to this, imagine if your QROPS provider is in a country where payments from such schemes are paid tax free - then pension related income can be enjoyed without the deduction of tax! Although do bear in mind that your liability to pay tax may be dependent on your country of residence at the time of receipt of monies.

Other benefits of these Qualifying Recognised Overseas Pensions Schemes for eligible British applicants include the fact that you are under no obligation to purchase an annuity by the age of 75 or be faced with a possible 82% tax charge if you do not!

A significant proportion of a traditional British pension has to be taken in the form of an annuity. This restricts investment freedom and it can restrict how you pass your wealth on to your loved ones when you die. With QROPS however, you are under no obligation to use your pension to purchase an annuity. Simply put, without the obligation to purchase an annuity you can invest your hard earned pension pot into potentially better returning assets and gain the very real advantage of passing remaining funds upon death to your beneficiaries instead of having your pension fund die with you.

QROPS allow the investor significantly more freedom when it comes to how funds are invested and how income and gains are used. For example, with a Qualifying Recognised Overseas Pensions Scheme you gain investment freedom, you can invest in onshore or offshore funds and access the highest fixed deposit rates available whilst achieving total investment diversification. Depending on where you live, you may be able to enjoy your pension income in a highly tax efficient way. You can leave unspent monies to your chosen beneficiaries upon death, take your income in the currency of your choice, protect your assets against possible future creditors potentially, and likely achieve greater confidentiality relating to all your investment activity.

QROPS & SIPPS- related Links