QROPS stands for Qualifying Recognised Overseas Pension Schemes as recognised by Her Majesty’s Revenue and Customs the HMRC.
QROPS came into affect with the Pension simplification rules on the 6th April 2006. The purpose of this part of the legislation was to enable pension holders to transfer their funds to another country when they retire to another jurisdiction.
What are the Benefits of a QROPS transfer?
This is by no means an exhaustive list but the most popular reasons are:
To have your pension paid in the same currency as the country you are living in so as to avoid the erosion of your income as currency rates change.
The ability to avoid UK income tax on your pension income, which dependent on your new country of residency could mean you pay a lower rate of tax and therefore receive more money in your pocket.
To never need or be forced to purchase an annuity and the restrictions this can place upon you. This means you are free to receive pension income in the way you see fit.
To be able to pass your remaining pension fund to your loved ones on death instead of paying 55% to the tax man as you would in the UK.
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