Qrops

Thockley

I left the UK some time ago and do not plan to come back. I get lots of adverts about QROPS aimed at expats claiming to 'save £s!!!' and that for British expats there are tax advantages on the pension draw downs and death benefits.

Can anyone explain in simple terms exactly what these benefits really are?

jamesd

The rules are similar to those for domestic pensions in the location where the QROPS resides. Except that HMRC requires that a QROPS scheme meet the same broad conditions as a UK pension, particularly limiting the lump sum that can be taken.

In countries where major withdrawing of capital has been allowed, HMRC has responded by removing QROPS certification from every formerly QROPS certified pension in the country.

There can be some greater flexibility than capped drawdown in the UK would offer but use great care because a lot of people falsely promote incorrect benefits that HMRC discovers later and subsequently responds to by levying penalties on the pensioner and pension scheme.

Thockley

jamesd wrote: »

The rules are similar to those for domestic pensions in the location where the QROPS resides. Except that HMRC requires that a QROPS scheme meet the same broad conditions as a UK pension, particularly limiting the lump sum that can be taken.

In countries where major withdrawing of capital has been allowed, HMRC has responded by removing QROPS certification from every formerly QROPS certified pension in the country.

There can be some greater flexibility than capped drawdown in the UK would offer but use great care because a lot of people falsely promote incorrect benefits that HMRC discovers later and subsequently responds to by levying penalties on the pensioner and pension scheme.

Thank you for replying. But I didn't understand from this what are the (claimed) tax advantages on the pension draw downs and death benefits of switching a UK pension to a QROPS.

jamesd

Here's some information about the differences: http://www.skandiainternationalknowledgedirect.com/investments/Pensions/Comparing-SIPPS-and-QROPS-for-clients-living-outsi.html . Though note that the UK income limit is now 120% of GAD, due to a recent rules change and is unlimited if using flexible drawdown rather than capped drawdown. Flexible Drawdown requires at least £20,000 of guaranteed income (from work defined benefit pensions, state pensions or annuities combined).

Some jurisdictions, notably say the Isle of Man and Guernsey, have been doing things like consulting with HMRC to get QROPS-friendly and HMRC-agreed rules in place.

Do note that QROPS are often sold by advisers who do not have the same level of regulatory oversight or protection as a UK-based IFA, who ends up having to pay redress to a client who has been wrongly advised and where the FSCS will provide some level of assistance in doing that if the IFA becomes insolvent.

If you get financial advice on this do take great care to check the level of regulation applying to the adviser and what the redress arrangements are if something goes wrong.

QROPS can be useful, just takes a lot of care to dodge the scammers and not get caught up in rule-breaking schemes. Be particularly careful about property-related schemes.

dunstonh

Beware of spam and scam companies operating in this field. Also beware of firms posting on internet discussion sites offering free consultations and advice whilst not complying with FSA financial promotion guidelines.

Board members also tend to be wary of new posters asking questions on areas rife with issues but then getting another new poster submitting links to another site. Especially when the spam post is thanked.

Thockley

dunstonh wrote: »

Beware of spam and scam companies operating in this field. Also beware of firms posting on internet discussion sites offering free consultations and advice whilst not complying with FSA financial promotion guidelines.

Board members also tend to be wary of new posters asking questions on areas rife with issues but then getting another new poster submitting links to another site. Especially when the spam post is thanked.

Didn't realize that reply was a spam. I have removed my thanks.

It highlights the reason I wanted to ask the question. I keep getting adverts offering QROPS and cannot tell if the companies are trustworthy. Most the sites also demand your contact details before giving you the free guide and then they hard sell.

Rather than moving to a QROPS it is probably safer to keep my pension as it is in the UK.

jamesd

If you want to check out Steve's company, note that it claims to have UK offices. So ask for and check with the FCA that the people working there are properly FCA registered to carry out pension work within the UK, including pension transfers. Then be sure that any business is done by that UK-regulated individual and business to get the strong UK protection.

Steve's post wasn't necessarily spam but it was at a minimum self-promotion, which is prohibited here - him apparently being an owner of the business. Dunstonh was partly referring to another trick: getting one poster to ask a question then a second one comes in with a reply.

In highly lucrative areas like QROPS it can make it hard to have a sensible discussion without all of the self-interested posters getting in the way. In part because they are mostly interested in promoting their own business rather than explaining here what the rules are for the various places.

On the other hand, go and look at the post counts and many, many years of posting history from say dunstonh and myself and you can at least be fairly sure that we're not here just to promote a QROPS scam.

This is sad because QROPS really can be useful.

jamesd

Steve, if you want to avoid being banned, try deleting your post before the Forum Team get to it and just posting straight explaining out some of the benefits of the various jurisdictions, with no mention at all of your own firm. It might not work but it'll be better than having the post deleted and your account banned. And explaining the real benefits in a sensible and non-marketing way may really be a good thing for business, there's a dearth or really reliable regular posters who are well informed on the subject.

PhilTilson

My advice would be to contact a major recognised financial advisor with overseas experience, such as Blevins Franks, and get their advice.

I have no relationship with this firm other than as a (reasonably!) satisfied customer!

I moved my pension into a QROPS when living in Spain several years ago and have recently repatriated it as a QNUPS. There are significant advantages, worth following up.

Thockley

PhilTilson wrote: »

My advice would be to contact a major recognised financial advisor with overseas experience, such as Blevins Franks, and get their advice.

I have no relationship with this firm other than as a (reasonably!) satisfied customer!

I moved my pension into a QROPS when living in Spain several years ago and have recently repatriated it as a QNUPS. There are significant advantages, worth following up.

Can you be specific about the significant advantages?

atush

Some jurisdictions, notably say the Isle of Man and Guernsey, have been doing things like consulting with HMRC to get QROPS-friendly and HMRC-agreed rules in place.

IOM QROPS pension I think (but not sure) have a 30% TFLS, and a tax charge of only 5% if DD pension is claimed as cash by beneficiaries. But do check.