Qualifying Recognised Overseas Pension Schemes (QROPS) are special overseas pension schemes which satisfy rules and regulations laid down by UK legislation. The Finance Act 2004 made it possible, from April 2006, for UK pensions to be transferred to any overseas pension scheme where the scheme manager has notified HMRC that it meets the requirements to be a QROPS and HMRC have subsequently responded to confirm this notification.
From April 2017, new regulations mean that any transfers made into a QROPS should be to a scheme in the individual’s country of residence, otherwise a tax charge of 25% will be applied to the Transfer Value. For these purposes the European Economic Area (EEA) is deemed to be one jurisdiction meaning that an individual living in one EEA country can transfer his pension to a scheme in another EEA country. Boal & Co have led the way in QROPS, having many such schemes established in the Isle of Man, Guernsey and Gibraltar, with some dating back to 2006. More recently we have been licensed by the Malta Financial Services Authority as Back Office Administrators for the Boal & Co Malta Pension.
The Boal & Co Malta Pension is able to take transfers from UK schemes for clients living within the EEA. The Trustees of the Boal & Co Malta Pension are ITC International Pensions Limited, and Boal & Co are licensed as the Back Office Administrators to the scheme.
Our Isle of Man QROPS is the Boal & Co Select Personal Pension Scheme (Select) which has been a QROPS since 2008. Select is administered by Boal & Co (Pensions) Ltd from our Isle of Man office.
Our Gibraltar QROPS is the Trafalgar Pension Scheme (Trafalgar) which received confirmation of its QROPS notification with HMRC on 16th May 2013. Trafalgar is administered by Boal & Co (Gibraltar) Ltd from our Gibraltar office.
Pension transfers into QROPS can be made from most forms of UK tax-approved pension schemes, including:
- occupational pension schemes, both Defined Contribution and Defined Benefit;
- SIPPs and other personal pension schemes;
- additional voluntary contribution (AVC) schemes;
- section 226 retirement annuity policies.
Transfers from a Defined Benefit pension scheme can be made but not if the pension has already commenced from that scheme, or if the scheme in question has entered the Pension Protection Fund. Such a transfer should never be considered lightly due to the guaranteed nature of the benefits being given up, and therefore individuals should seek proper independent financial advice to understand the various factors involved before electing whether or not to proceed.
There are many advantages of transferring a UK pension into a QROPS, in particular when the individual is living outside the UK and intending on remaining a non-UK resident in retirement, such as:
- improved tax efficiency (both during lifetime of plan and on death);
- enhanced retirement lump sum;
- increased investment potential;
- effective succession planning;
- re-domicile and consolidation of pension assets;
- multi-currency selection;
- security and certainty.
For more information on each scheme, please click the appropriate box below: