What are QROPS Pension Schemes?
Firstly let us understand the full term of QROPS. QROPS stands for Qualified Recognized Overseas Pension Scheme, hence QROPS. Most of us haven’t learnt about this term. This is an overseas pension scheme that meets certain requisites set by “Her Majesty’s” Revenue and Customs HMRC. In order to attain a QROPS, you must have a beneficial owner and trustees who can receive and transfer UK Pension benefits. It is said that decades earlier, QROPS was one such program that was a part of UK legislation, launched on 6th April, 2006. QROPS was taken up as a direct result of EU human rights to meet the requirements in regards to freedom of capital and financial movement amongst the masses. You can see more about this on www.qropshelpcentre.co.uk
For whom QROPS is beneficial?
QROPS can be appropriate and beneficial for the UK citizens or even for those who were earlier the UK citizens but have now left UK and immigrated permanently to other nations whether for other livelihood or may be they intend to retire abroad and settle there itself. For such people QROPS has been formed so that they do net feel the crunch and crisis of capital movement, even if they immigrate or retire abroad permanently.
Other details –
An updated version and details about QROPS is always published in the House on the 15th of every month. This list is circulated in the entire country so that the people may be aware of the changes or amendments if any. However, sometimes, the list is updated on urgent basis or on a short notice to remove various schemes temporarily. Along with this reviews are carried out incase any fraudulent activity is observed, the changes are made temporarily.
However, the requisites of QROPS have changed with effect from 6th April 2017. Hence the people who are taking the transfers to other nations permanently are meeting the dates of new requirements or not. Although the HMRC cannot guarantee that any transfer would be liable of any further taxes or not. Thus, it is your duty to find out that whether a UK citizen, you re being liable to pay any transfer tax or not.
Tax relief is given on pensions to encourage saving to provide benefits in later life. Accessing benefits (directly or indirectly) before the age of 55 will result in a liability to UK tax charges in all but the most exceptional circumstances.
HMRC will usually pursue any UK tax charges (and interest for late payment) arising from transfers to overseas entities that don’t meet the QROPS requirements even when they appear on this list.
You should seek suitable professional advice, including from a regulated financial adviser.