As a UK expat do you now live in or are you about to emigrate from the UK to countries such as: Spain, France, Italy, Canada, US, Israel, Singapore, Thailand, Malaysia, United Arab Emirates (Dubai) and China?

Are you looking for key upto date information on your options when considering transferring your pension scheme to an offshore provider to say a Guernsey Qrops or New Zealand Qrops?

Are you looking for independent advice from a regulated advisory firm specialising in overseas pension transfers; a firm who can offer advice on the most upto date and innovative schemes currently available in the market place?

Transfers to for example, a Guernsey QROPS provider are available with a pension fund from as little as GBP 120,000 or a New Zealand Qrops from as little as GBP 20,000.

WHAT ARE QUALIFYING RECOGNISED OVERSEAS PENSION SCHEMES OR QROPS
Her Majesty's Revenue and Customs (HMRC) permit UK pension rights to be transferred to a QROPS. The QROPS must behave in effect as if it were a UK scheme for those members who have been resident in the UK at any time in the previous five tax years.

The key attraction of a transfer to a QROPS lies in the fact that for those who are currently in the position of having been non UK resident for at least five tax years (or when they satisfy that condition) this requirement falls away.

After that time the pension fund becomes subject to the laws of the relevant overseas jurisdiction – and for example the UK requirement to purchase an annuity by age 75 (or be faced with the prospect of a possible 82% tax charge) no longer applies.

QROPS can be set up for ex UK residents as soon as they move abroad and become an "expat" non resident of the UK (and intend to remain so over the long term).
TRANSFERRING UK PENSION RIGHTS TO A QROPS

QROPs may be used to receive transfer values from any UK registered pension scheme including protected rights funds.

Transfer values may be taken into a QROPS from UK arrangements (other than annuities and occupational pensions) even where benefits have been taken.

For example if you have an existing UK self-invested personal pension scheme and even where unsecured income is being drawn (generally referred to as “drawdown”) it may be beneficial to transfer to a QROPS where you are non-UK resident and intend to remain so over the long-term.

TAKING ADVICE
The transfer of pension rights from any UK registered pension scheme is not a matter to be taken lightly.
It is important to choose an advisory firm that is regulated, can offer independent advice and whose advisers are experienced with UK pensions and overseas transfers.

WHAT QROPS ARE AVAILABLE
Countries in which QROPS options are based include Guernsey , New Zealand , Isle of Man and Hong Kong.

In May 2008 HMRC withdrew QROPS status from all Singapore based QROPS. This emphasises the importance of taking careful independent advice from industry experts who are in regular contact with HMRC to ensure that any transfers do not nor are likely to fall foul of HMRC regulations.

We are seeing new and innovative QROP Schemes coming to the market on a regular basis.
A New Zealand based scheme may be of particular relevance to those who are looking to release capital from their fund.

Gibraltar is in the process of reclassifying its status as a viable option for Qrops in Gibraltar. Whilst, Malta Qrops are in the final stages of preparation before coming to the market later in 2010. We have access to arguably the largest and most upto date selection of QROPS suited to your needs.

INVESTING THE FUNDS TRANSFERRED TO A QROPS
A wide range of investments are possible within a QROPS - and the possibilities become more or less unlimited once the QROPS member has been non resident for five complete tax years or more.
There is no limit to the size of funds that may be accumulated within a QROPS.

Transfer values from most UK registered pension schemes will be paid to the QROPS in cash. In other instances it may be possible to transfer existing scheme assets, but the additional costs associated with this would need to be taken account of.

On receipt, cash funds will be placed on deposit by the scheme administrators in an account designated for the member’s fund with a leading institution with a competitive rate of interest being applied.

TAKING BENEFITS - RETIREMENT AGE.
There is generally considerable flexibility in terms of the timing of taking benefits from a QROPS.
In most instances benefit can be taken at any time between the ages of 55 (from April 2010) and 75, but it can be possible to access funds before or after these ages.

RETIREMENT AND DEATH BENEFITS
What follows is based upon the assumption that the QROPS member on taking benefit is not UK resident nor has been resident during the five tax years preceding the tax year in which benefit is taken.

Benefits may be taken from a QROPS in pension form with no particular limits on the amount of pension that may be taken. There is no obligation to buy an annuity from a life office and the amount of “income” required may be drawn from the fund.

This does not however preclude the possibility of withdrawing most or the entire fund in a single transaction. More information on this option is available on request.

In whatever form benefits are drawn from QROPS, there will be no deduction of taxation at source. Taxation will apply in accordance with the legislation governing the QROPS scheme members’ country of residence.

Following the death of a QROPS member any remaining fund may be subject to the discretionary disposal of the scheme trustees in accordance with the provisions of the scheme rules.

This will generally result in a disposal in lump sum form to beneficiaries nominated by the scheme member.

It may be possible for the residual fund following death to be paid by the QROPS to the funds of other members created, for example, for the benefit of other family members.

However, if you have transferred UK pension rights into a QROPS then in the event of death, where you have been a UK resident within the five full UK tax years preceding the date of your death, benefits paid will be subject to UK restrictions and UK taxation requirements.

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Information
http://www.hmrc.gov.uk/manuals/rpsmmanual/RPSM14101050.htm

QROPS FREQUENTLY ASKED QUESTIONS
Listed below are answers to many of the frequently asked questions we receive about the transferring of pensions into a QROPS. The list of questions is reveiwed and updated on a regular basis.

Q1 - Am I able to transfer protected rights funds into a QROPS?
A1 - YES - so long as the receiving QROPS is willing to accept it.

When the transfer takes place form CA 1881 needs to be completed to enable HRMC to keep track of where the protected rights are. In transferring protected rights it is necessary to state that you understand that all protection associated with UK pensions legislation is being given up.

Q2 - Can I transfer benefits that are in payment to a QROPS?
A2 - YES - so long as the receiving QROPS is willing to accept transfers of funds where the member is in receipt of unsecured or alternatively secured income.

If the member has not been a UK resident during the last five complete tax years the UK rules associated with these benefits do not apply. The UK provisions associated with these type of benefits apply until the five year rule has been satisfied. Annuities in payment and pensions in payment from occupational final salary schemes may not be transferred.

Q3 - Can residents of the USA transfer a UK pension right into an IRA?
A3 - PROBABLY NOT - QROPS status has significance for UK tax purposes only.

UK scheme administrators and members should contact the relevant overseas authority for confirmation.
However, a possible solution is to transfer a UK fund to a non US based QROPS leaving the funds outside the USA.

Q4 - Can I purchase residential property with my QROPS fund?
A4 - YES - subject to conditions

If a member who has transferred a QROPS and has not been a UK resident during the last five complete tax years then the operation of the QROPS becomes subject to the legislation associated with the jurisdiction to which the fund has been transferred. Some of these jurisdictions do permit investment into residential property although often only through indirect ownership via a corporate structure. If the member fails to satisfy the five year rule then purchase of residential property within a QROPS would be subject to a tax charge typically seventy percent of the asset value.

Q5 - Are there any circumstances in which I should not transfer to a QROPS?
A5 - YES - although in most situations we have come across associated with non-UK residents the arguments are overwhelmingly in favour of transferring UK pension rights to a QROPS.

However, some of the older pension plans have benefits such as guaranteed annuity rates that were set when interest rates were much higher than today. In those circumstances it may be better to stay put, however it is important to seek appropriate advice.

Q6 - How long does the process take?
A6 - Allow a couple of months - occupational scheme transfers may take longer.

The process is initiated by asking you to complete a letter of authority. This enables the most upto date information about your scheme to be obtained including benefits and transfer value.
The correct discharge forms are also obtained should you decide to accept any recommendation to transfer to a QROPS.

Q7 - Which jurisdiction should I consider transferring to?
A7 - Countries in which QROPS options are based include Guernsey, New Zealand, Isle of Man and Hong Kong.

It is important to look for strong investor protection principles which are similar to those associated with the UK. Additionally, it is important to look for jurisdictions where, after the QROPS member has been non resident for five complete tax years, there is a significant improvement in the investment and benefit options available. For example, where there is no requirement to buy an annuity at any time. Guernsey Qrops tend to be suited to funds in excess of £ 120,000 whilst New Zealand Qrops tend to be suited for smaller funds where the main aim is to release some cash from the fund.

Q8 - Is an employment contract a requirement of a QROP?
A8 - This depends on the particular circumstances of the member.

However, all the referrals we have made to date have been into arrangements that are like personal pension arrangements in the UK with no form of employment contract required.

Q9 - Can I access the entirety of my fund as a lump sum following the transfer to a QROPS?
A9 - This depends on the circumstances.

A QROPS member remains subject to UK pension rules unless or until you have been non UK resident for five complete tax years. After this period all of the UK restrictions fall away unless you once again become a UK resident. Access to the fund is then dependent on whether the jurisdiction associated with the QROPS permits this. There may be taxation consequences in respect of this course of action depending on your country of residence at the time. It is important to seek appropriate advice as each individual's circumstances may be different.

Q10 - What are the costs associated with the transfer of a QROPS?
A10 - This depends on individual circumstances.

Costs tend to be broken down into three distinct elements - the advisory costs; the Provider costs and lastly, the ongoing investment costs.

Q11 - Can I transfer the assets held within my UK registered pension scheme into a QROPS without first liquidating them into cash?
A11 - This depends.

If the assets are held within an insurance company based scheme then the funds in which you are investing will be converted into cash, and the transfer to the QROPS will be in cash.
If your existing registered pension scheme is a SIPP or a SSAS then it may be possible to transfer the existing assets to the QROPS, if the receiving scheme administrators or trustees are willing to accept them.

For further information:
Please e-mail qrops@arbutus-business.com