What is a QROPS?

Qualifying Recognised Overseas Pension Scheme
Qualifying Recognised Overseas Pension Scheme

What is a QROPS?
A Qualifying Recognised Overseas Pension Scheme is an international pension that facilitates the transfer of UK pension funds without incurring a tax charge. The client has the potential to benefit from substantial tax advantages and have local qualified investment advice.

Who is it for?
Individuals with UK pensions who have left or are leaving the UK. Typically this would be the British ex-pat community and South African’s who have worked in the UK or those wanting to retire in SA

What pension can be transferred?
Yes: Personal pensions (retirement annuities) in
payment (living annuities) or not. Company
pensions not in payment.

No: State pension or lifetime annuities.
Minimum: £100,000.
Client: Potential tax saving on death (55%), local advice from trusted source, currency options, investment flexibility.
5-year rule

If the client has been a UK tax resident in the last 5 complete tax years we need to report certain events to HMRC (UK equivalent of SARS). Therefore during that 5 year period we run the QROPS under UK rules after this period we only use Guernsey rules. This allows for greater flexibility of income payments and no tax on death benefits.

Tax advantages for the client
After the client has been non-UK tax resident for 5 complete tax-years lump sum death benefits can be paid with-out deduction of UK tax. From April 2011 the rate of tax on death benefits in the UK will be 55% when a client has commenced benefit payment.
Investment options

You can choose from investment funds, equities, bonds, cash and commercial property. Advisory, discretionary and self investment options are available. Multiple currency options are also possible.

Income & benefits
The client can start taking benefits from age 55. They can access up to 25% as a lump sum and the remainder pro-vides an income (similar to a living annuity).

The maximum income depends a number of factors such as: age, sex and gilt yields. The minimum is income is nil. By way of an example a male age 60 would have a maxi-mum income of 6.2 % per annum but in Guernsey the maximum would be 7.4 % per annum.

INFORMATION KINDLY SUPPLIED BY The Overseas Pension from Fairbairn Trust
Fairburn offer:

  • First class service
  • adviser support
  • financial strength.

A 20 year history of working with the South African investment and adviser community.
Competitive along with investment and currency flexibility.

Getting more information

Clive@skyewealth.com

 


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