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"What are QROPS? QROPS is short for Qualifying Recognised Offshore Pension Schemes as identified by the Her Majesty’s Revenue and Customs (HMRC). They came into effect under the pension simplification rules of April 6 2006. The aim of this a part of the legal guidelines was to allow a UK pension plan owner to transfer their funds to another country when they retire to a different QROPS jurisdiction.

So who should be thinking about a transfer to a QROPS?

A person with a UK pension who might be either planning to move overseas or possibly already going to move abroad no matter whether your pension is presently in payment or not. Additionally those expatriates who have accumulated UK pension plan benefits also can think about QROPS transfer.

Exactly what are the important things about this kind of transfer? This list is by no means inclusive however the preferred reasons are;

1. To get your pension plan paid in the same currency that you live in so to avoid the erosion of your profits as currency prices change.

2. Capability to avoid UK income tax on your pension plan income that, depending on your country of residence will mean you have to pay a lower rate of tax and therefore obtain more money.

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

4. To be able to pass on your remaining pension fund to your loved ones on your death. Rather than paying 55% in tax to the Great britain Government.

5. Higher investment choice and adaptability which suggests you’re able to increase your fund growth.

Who should you trust your money with?

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

1. Ensure that you are using an agency who has experience in this market.

2. Ensure that your advisor does a full transfer evaluation, taking into consideration the benefits and drawbacks of a transfer which includes fees, jurisdictions and tax concerns.

3. Due to the advanced nature be sure the advisors are qualified to the industry standard to QCF Level 4. Anyone without these credentials won't be doing you justice. You'll find so many QROPS jurisdictions where you stand able to find a HMRC authorised plan, including Malta, Jersey and the Isle of Man. Nevertheless there are a variety of rules which have been brought in during April 2012 by the UK Government that has had a severe result on the number of schemes which qualify under the new HMRC rules.

HMRC were feeling that although many of the schemes were definitely meeting with the letter of the legislations nonetheless they weren't in the spirit of the law. Guernsey schemes have been especially horribly hit as schemes registered up until April 2012 allowed non-residents to pay no taxes for their policies whilst residents had to pay tax. This can be in contravention of the new rules and consequently 310 out of the 313 rules have been taken out of the sanctioned list.

For more information on QROPS as well as the continuing changes to the schemes please contact us at MyQROPS.net.