QROPS (Qualifying Recognised Overseas Pension Scheme)

A QROPS (Qualifying Recognised Overseas Pension Scheme) is a personal pension that is both qualified and recognised by HMRC as suitable for a British pension transfer.

In simple terms, a QROPS is like an overseas SIPP – it is a flexible pension giving members the ability to choose where and how their money is invested, at what age they want to start receiving benefits (from age 55) and it allows them to leave their residual pension to beneficiaries of their choice.

QROPS were introduced over a decade ago following an EU Directive that enabled the free movement of assets and people. They remain a useful option for anyone that has moved away from the UK. However, as of 9th March 2017, the UK government imposed a 25% overseas transfer tax charge on all new transfers where the member lives outside the European Economic Area (EEA). There are some exemptions to this rule – where both the member and QROPS reside in the same jurisdiction, for example – which further underlines the need for expert advice.

The benefits of transferring to a QROPS include the following:

  • Qualified and recognised by HMRC
  • Increased tax-efficiency
  • Excellent LTA tax-planning tool
  • Full control over investments with the aid of a financial adviser
  • Control over how and when you take benefits from age 55
  • Access to a tax-free cash lump sum
  • Uncapped Flexi-Access Drawdown
  • Pass your pension on to named beneficiaries of your choice
  • No need for probate on the proceeds following death
  • No inheritance tax
  • Consolidate all of your pensions into one easy to administer scheme

There are many benefits to transferring your pensions to a QROPS and which features are most relevant to you will depend on your personal circumstances.

For further information, please contact us.