Qualifying Recognised Overseas Pension Schemes (QROPS) are special overseas pension schemes which satisfy rules and regulations laid down by UK legislation.
Boal & Co have led the way in QROPS, having such schemes established in the Isle of Man, Guernsey and Gibraltar and Malta, with some dating back to 2006.
Transfers from existing schemes
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.