Breytenbachs Cross Border Advisory

Pension Transfers

QROPS – Tax efficient Pension Solutions

Anybody who has worked in the UK and paid into a pension scheme there, but now lives abroad or is planning to move, is able to transfer their UK pension into a QROPS – potentially reducing their tax liability.

The QROPS industry is highly regulated, and consequently, for pension schemes to qualify as a QROPS, they must satisfy strict HMRC requirements. These requirements include:

  • Being a recognised overseas pension scheme and have an HMRC QROPS number.
  • Ensuring at least 70% of the transfer fund will be used to provide a pension for life.
  • Undertaking to notify HMRC of any payment in respect of a member for 10 years from the date of transfer.

Advantages of QROPS

  • No UK tax charge on transfer value.
  • No UK tax charge on death (potentially 55% if funds remain in the UK).
  • Fund can be passed on to beneficiaries upon death.
  • Up to 30% pension commencement lump sum allowable.
  • Greater control over where the pension fund is invested.
  • Choice of currency options to help mitigate exchange rate risk