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"What are QROPS? QROPS represents Qualifying Recognised Offshore Pension Schemes as well known by the Her Majesty’s Revenue and Customs (HMRC). They came into effect under the pension simplification laws of April 6 2006. The reason for this part of the procedures was to allow a UK pension owner to move their funds overseas when they retire to a different one QROPS jurisdiction.

So who should look at a transfer to a QROPS?

Anyone with a UK pension who's either going to move overseas or maybe already going to move abroad regardless of whether your pension is currently in payment or not. What's more those expatriates who have accumulated UK pension benefits can also think about a QROPS transfer.

What are the benefits associated with this sort of transfer? This list is by no means inclusive nonetheless the preferred reasons are;

1. To have your pension plan paid in the same currency that you simply live in so to stay away from the erosion of your income as currency prices change.

2. Capability to avoid UK income tax on your pension plan income which usually, depending on your country of residence would mean you pay a lower rate of tax as a consequence have more money.

3. To never need or be forced to purchase an annuity, this means you can get your pension income as the way you see fit.

4. To be able to pass on your remaining pension plan fund to your beloved ones on your death. Rather than paying 55% in tax to the United kingdom Government.

5. Bigger investment selection and flexibility that means you’re able to maximise your fund growth.

Who should you entrust your money with?

You should consider 3 key points as part of your own due diligence;

1. Make sure you are using an agency who has experience in this market.

2. Ensure your advisor does a full transfer assessment, taking into consideration the positives and negatives of a transfer which includes costs, jurisdictions and tax concerns.

3. Due to the sophisticated nature be sure the consultants are qualified to the industry standard to QCF Level 4. Anyone without these credentials won't be doing you justice. There are a number QROPS jurisdictions where you are able to find a HMRC authorized scheme, including Malta, Jersey and the Isle of Man. However there are lots of rules which were brought in during April 2012 by the UK Government which has had a severe result on the amount of schemes which qualify under the new HMRC rules.

HMRC thought that while a number of the schemes were definitely meeting with the letter of the laws nevertheless they just weren't in the spirit of the law. Guernsey schemes happen to be in particular horribly hit as schemes registered up until April 2012 allowed non-residents to pay no tax on their policies whilst residents were forced to pay taxes. That is in contravention of the new rules and consequently 310 out of the 313 rules have been removed from the recognized list.

For more information on QROPS and the ongoing changes to the schemes please contact us at MyQROPS.net.