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What is a QROPS?

what is a QROPS?

What is a QROPS?

If you’re a British expat who has retired abroad, you need to know what a QROPS is, as it could make a significant difference to your financial wellbeing moving forward. So what is a QROPS? A QROPS is a Qualifying Recognised Overseas Pension Scheme—and there are some critical differences between QROPS and UK-based pension schemes. Read our guide to QROPS and then talk to your financial adviser as to whether moving your pension into a QROPS would benefit your own particular circumstances.

The big expat question: what is a QROPS?

If you find yourself asking, ‘What is a QROPS?’—then read on. QROPS are designated pension schemes that are based abroad and which have been recognised by Her Majesty’s Revenue and Customs (HMRC) as fulfilling particular required criteria to make them suitable for UK citizens who have retired abroad.

Transferring your UK pension into a QROPS lets you move your pension offshore without incurring the fees and charges that you would if you put your money into an unapproved scheme.

Once your pension pot is in a QROPS, it will no longer be subject to any future changes in UK pension regulations.

A QROPS can be used as an umbrella for any number of pension schemes and other investment vehicles that you have.

What is a QROPS and what are the benefits of taking one out?

Now we’ve answered the first part of this question—what is a QROPS?—it’s time to explain the benefits of moving your pension into one. And there are certainly some very significant benefits to be had.

  • Once your money is in a QROPS rather than a UK pension, you won’t pay UK income tax on your pension income, which is a substantial benefit given that you might pay UK tax rates of up to 44 percent.
  • If Brexit leads to changes in UK pensions regulations, your QROPS assets won’t be affected.
  • For those expats who will be moving from country to country, QROPS pensions are completely portable and can be drawn down on in whatever currency you wish.
  • British state pensions for UK expats living in Europe may be frozen once Britain leaves the EU, so having your own offshore pension on which you pay no UK tax will go to make up for this.
  • Once you’ve been an expat for more than five years, you can leave your QROPS assets to your spouse or loved ones without incurring UK death duties.
  • When you take out a QROPS, there is no requirement to buy an annuity, which is a massive advantage in these times of poor annuity rates.
  • Depending on what jurisdiction your QROPS falls under, your tax status may change for the better.
  • There are no upper limits on how much money you can place into a QROPS scheme, in contrast to the UK upper limit of the amount you earn each year.
  • QROPS are far more flexible than UK pensions, both in terms of how your money can be invested and how and when you can draw down on them.


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