Should I transfer to a QROPS?
When you’re an expat, finances can (and invariably do) get complicated. In today’s article, we’re going to identify when expats should be considering a QROPS – and perhaps crucially, answer the question ‘Should I transfer to a QROPS’?
Let’s set an example: take a person aged in their mid-fifties with a fund totalling under £500,000, living in an area where their UK pension would be taxed twice over. Their intention is to retire on or around their 60th birthday and move back to the UK or potentially to a country within the EU – is a QROPS investment the right choice for them? Let’s answer this below.
People who should consider QROPS
If you fall into one or more of the following brackets, a QROPS, or Qualifying Recognised Overseas Pension Scheme, could be a sensible investment:
• You are retiring in a jurisdiction where your pension would be taxed twice
• Approaching your mid-70s
• You are retiring in a jurisdiction with a limited double tax treaty. Or a jurisdiction where a QROPS would provide taxation access advantages when you retire
• Your funds are in or around the pension lifetime allowance (in excess of £800,000 and you a interested in avoiding the Lifetime Allowance Tax)
• You have a personal reason or lifestyle reasons for wanting to move your money out of the United Kingdom
Although there will always be exceptions to the rules. If you do not fit into any of these criteria then it is probably unwise to consider a QROPS and a International SIPP maybe more suitable.
Does my country affect whether should I transfer to a QROPS?
In a nutshell, no. The most important aspect should I transfer to a QROPS is where you are intending to retire and actually access your funds once you retire.
Take our earlier example of a person in their mid-50s who lives in an area where they will be taxed twice. The only reason they would have for considering a QROPS would be the last bullet point (personal reasons). They would in fact be better off keeping their money in a UK-based pension – possibly a SIPP.
Uncertainty regarding the best options
With expert expat financial advice, Harrison Brook is on-hand to help you get more out of your money. So why not make the smart choice and contact one of our professionals today.