10 Tips About QROPS Expat Pension Transfers

If you are an expat and want to transfer your UK pension to an offshore Qualifying Recognised Overseas Pension Scheme (QROPS) here are 10 tips to consider

Most QROPS transfers go ahead without any hitches, but these are some of the points that can cause problems.

  • You must belong to a defined contribution (DC) pension scheme.

A DC pension is a private pension that receives contributions just from you, your employer or both of you.

The final benefits depend on the performance of the stock market that the funds are invested in up to the time when you retire.

  • The DC pension cannot be in drawdown
  • You must be aged between 18 and 75 years’ old
  • You must not be tax resident in the UK or planning to leave Britain to live overseas permanently within the next six months or so
  • You may not be British, but lived and worked in the UK for a time and saved into a DC pension.
  • You can live anywhere in the world except for Britain – although some countries tax treat QROPS pension funds as investments and are not suitable locations for expats to live and transfer retirement savings to QROPS.

One country where specialist tax advice is needed is the USA.

  • The country where you live does not have to have a QROPS provider.

Some providers in Malta, Gibraltar, the Isle of Man will offer expats in other countries QROPS pension.

Some places, such as Guernsey and New Zealand will only allow residents to transfer UK pensions to a QROPS.

  • Pension fund values are not that important – but beware any outgoing funds will be matched against the lifetime allowance and will attract a tax penalty if they exceed the threshold.

The current lifetime allowance limit is £1 million.

  • Always ask an experienced and qualified international IFA to arrange your pension transfer to a QROPS for you.

They will tailor your QROPS to your personal financial goals and attitude to investment risk.

  • Make sure your adviser checks that the receiving scheme meets HM Revenue and Customs (HMRC) guidelines from QROPS pensions – UK pensions cannot transfer money to offshore schemes that are not on the HMRC QROPS List