A QROPS is a pension transfer scheme that is recognised and registered by HMRC. It has to meet certain conditions and standards that are equivalent to those of a UK pension. Most UK pension can be transferred into an overseas scheme.
IFAI can take you through the process step by step ensuring all positions are correct. UK Pension Schemes are heavily regulated and restrictions are imposed on how those schemes can operate.
For non UK residents (including non-UK nationals who have frozen pension benefits in the UK) and persons leaving the UK on a permanent basis, the transfer of their UK pension to a QROPS can permanently remove many of the restrictions that exist under UK legislation and be significantly more tax efficient.
QROPS pensions schemes enable considerable flexibility in the range of investments available. A transfer from a UK registered pension scheme to a QROPS is regarded as a "benefit crystallisation event", so the transfer must be tested against the individual member's lifetime allowance (LTA.) - more information can be obtained here.
Using a range of international investments. funds within a QROPS can grow with no UK tax deducted (depending on the investment chosen).
If the member is a non-UK tax resident, no UK income tax is deducted at source on pension income. By carefully selecting the jurisdiction for the pension, maximum advantage can be taken if Double Taxation Agreements (DTAs) are available.
A US QROPS must meet certain conditions and the client may have no involvement in the selection, management, or ownership of the pensions underlying investments. However most features are similar to a regular QROPS and the funds can be invested in a similar way. Thanks to the multi-currency options available from a QROPS, clients can have some or all of their pension payments in retirement paid in US Dollars, if they wish, to mitigate currency exchange rate risk.
In addition to mainstream investments such as unit trusts, portfolio bonds, investment platforms, QROPS can also invest in international commercial property and other approved assets, subject to Scheme/Trustee Approval.
IFAI provide a risk related approach to portfolio management based on an individual's personal approach and circumstances. This process includes - accessing investment mix and policy, matching investments to objectives, asset allocation for individuals & institutions and balancing risk against performance.
It is possible for benefits from a QROPS to be paid out with no UK tax, therefore passing on more of the fund to a member's beneficiaries. Certain conditions apply and rules can vary depending on each jurisdiction.
Many UK pension schemes, including stakeholder pensions, have a percentage based charging structure. A QROPS from one of our recommended trustees has a fixed price, all inclusive, initial and annual fees, which could offer a significant saving to your clients as the costs are not linked to the value of the fund.
As your life changes, so should your financial recommendations, this ensures relevance of position in a changing financial world.