Qualifying Recognised Overseas Pension Scheme– Knowing The Abcs

By Author: simmi
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Are you worried about your approaching retirement and pension issues in the UK as you plan on settling overseas? Is number crunching giving you a headache as you plan to settle abroad? Finally, have you ever heard about QROPS? If not, read on ……
QROPS for Qualifying Recognised Overseas Pension Scheme. In other words, if you hold a pension in UK and wish to settle abroad, you can transfer your UK pension into a QROPS.
To the uninitiated, the UK pension laws were mostly characterised by several restrictions. These restraining laws provided an easy means for the government to maintain their tax earnings from pension funds.
Qualifying Recognised Overseas Pension Schemes was introduced in 2006 when some of the regulations were lifted on overseas pension transfers from the UK. With government approval, it became easy to move one’s pension to a QROPS scheme.

Making the Most of QROPS
If you have been a UK non-resident for at least five years, you easily qualify for this new pension scheme! The good news is that setting up a QROPS allows you to save ...
... on your taxes. How? Your pension funds will be exempt from the UK tax laws, though you will be required to honour taxes in your chosen QROPS jurisdiction.

One of the many advantages of this tax-friendly scheme is you can also decide the currency in which your pension would be held. In the absence of a Qualifying Recognised Overseas Pension Scheme, as a UK pensioner planning to settle abroad, you would have faced two problems. Firstly, your funds in Sterling would be subject to global exchange rate fluctuations if you chose to withdraw them abroad. Secondly, your funds would be subject to certain banking fees for transferring and exchanging your money into another bank account. But with QROPS pensions, you can avoid all these issues by choosing the same currency for your pension that you spend on an offshore location.

Simmi writes for Gerard Associates LTD, for more information on QROPS advice , click on QROPS .