A QROPS, or a Qualifying Recognized Overseas Pension Scheme, is an international pension scheme that can receive the transfer of UK pension benefits. It satisfies criteria stipulated by HM Revenue and Customs (HMRC) and it qualifies as an overseas pension scheme.
It is a scheme designed for any UK resident and more often for UK-connected individuals who live and work overseas. The QROPS pension scheme must respect the rules of the country where it is operating.
Mutual funds, government and corporate bonds, cash deposits, equities and commercial property may generally be invested in a QROPS. Residential property, art, personal loans and other assets cannot be invested in a QROPS.
A non-UK resident may get a number of benefits when transferring a pension scheme to a QROPS. He or she would have greater investment flexibility, the ability to invest in multiple currencies, the permission to give the pension to anybody after his or her death, and not having to pay UK taxes on the QROPS.
UK nationals who live abroad, or individuals who have previously worked in the UK, with personal and corporate UK pension plans, are eligible for a QROPS. Rules and restrictions will apply depending on the country of residence and plans of the individual.
Many kinds of pension schemes, including individual plans and employer-sponsored plans, can be transferred to a QROPS. You cannot transfer a UK State pension plan nor any defined benefit plan and insurance company annuity already in payment, to a QROPS.
Depending on the jurisdiction chosen to transfer the QROPS, it will usually have a pension commencement lump sum (PCLS) of up to 25% or 30% of the value of the fund, which may stay the same throughout retirement. The balance is usually used as a drawdown pension.
This is dependent on the jurisdiction of the QROPS. The PCLS may be taxed in your country of residence but will not be taxed at source.
Yes, depending on the case. Does the other scheme permit transfer from a QROPS? There will be some questions to be answered.
Multiple pensions can be transferred to a QROPS.
A QROPS may be accessed at 55 years of age.
Yes, this is recommended, especially if you are doing a pension transfer.
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