There may be several reasons why you are considering transferring your UK pension, whether you are moving back to the UK or simply trying to get the most from your pension fund it is imperative you consider all the options available to you. While there are many benefits to QROPS, depending on your personal circumstances and with the new rules coming into effect this year, it may be beneficial for you to look at other pension schemes.
A QROPS and a SIPP are now more similar than ever, all though there are still some distinct benefits of having a QROPS if you are living overseas. With rules frequently changing what works for you now may not be so favourable in the next couple of years, so it is imperative that you regularly review your arrangements and seek independent financial advice.
As an international financial advisory and pension transfer specialist, the experienced team of advisors at Prism Xpat can support and guide you through all aspects of transferring QROPS in the UK to ensure you have the most appropriate and effective strategies in place.
How Do SIPPs & QROPS Compare?
|Full name||Qualifying Recognised Overseas Pension Scheme||Self-invested Personal Pension|
|Jurisdiction||Can be held in a tax advantageous jurisdiction outside the UK||UK only|
|Cost||Depends on size of fund||Depends on size of fund|
|What if you move back to the UK?||If kept once you moved back to the UK it would be treated as a SIPP||No changes|
|Before retirement||Up to 30% pension lump sum free from UK tax from the age of 55 (in some cases earlier). Tax may be due in your country of residence if outside the UK||25% lump sum free from UK tax after 55. Tax may be due in your country of residence if outside the UK|
|Before age 75||Income drawdown||Income based on GAD rate or flexible drawdown|
|After age 75||No change||No change|
|Income tax||If you live outside of the UK, you will not be subject to UK income tax but will be subject to local income tax||If you live outside of the UK, you will not be subject to UK income tax but will be subject to local income tax|
|Inheritance tax||Not subject to UK inheritance tax||Not subject to UK inheritance tax|
It is always recommended to seek independent financial and pension advice before transferring a QROPS in the UK to ensure you understand the solutions available to you, the benefits of each and any exit fees you may occur when exiting your QROPS.
If you are thinking of moving back to the UK and are looking for independent advice on QROPS in the UK, the specialist team at Prism Xpat can advise you on your options and provide a formal recommendation on your optimal course of action. Get in touch to discuss transferring QROPS in the UK.