A QROPS is a Qualifying Recognised Overseas Pension Scheme which has been approved by Her Majesty´s Revenue & Customs to accept a pension transfer from a UK pension scheme. They offer enormous financial benefits for the thousands upon thousands of ex-pats now living or planning to live out their retirement abroad. This ability to transfer a pension from the UK to another country was brought into action on 6th April 2006, dubbed ‘A-Day’, when massive reforms swept through personal and work pensions in the UK. Under these changes people no longer resident in the UK, but who had UK pensions, were allowed to transfer their pensions across to a QROPS, provided they met certain conditions.
To find out whether your pension is suitable for a QROPS, Nexus Insurance Brokers can advise you on your individual situation and help determine which offshore pension providers would be best for you. The benefits are many and varied but include being able to draw a tax free lump sum of 30 percent, no obligation to purchase an annuity at 75 years of age, greater investment flexibility and avoidance of crippling UK inheritance tax.
To be able to take full advantage of a QROPS transfer, it is necessary to have been resident outside the UK for at least 5 complete tax years with no plans to return for any long period of time, although the process of a QROPS transfer can be initiated long before this.