Thursday , 21 September 2017
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QROPS

What is a QROPS?

A QROPS is a Qualifying Recognized Overseas Pension Scheme. It is a pension scheme held abroad by trustees that HMRC recognizes. It avoids all UK taxes including a 55% tax upon death whilst drawing benefits and UK income taxes of up to 45%. 100% of your pension gets passed on to your kids upon death. You can then invest in almost anything you like apart from residential property.


How Does a QROPS Work?

  • Your UK pension gets transferred from the UK to your designated QROPS trustees overseas. This is usually held in Gibraltar, Malta or New Zealand.
  • The money then gets reinvested, usually in a tax-free wrapper where you can invest in a range of ETF’s, mutual funds, bond funds, property funds, UK government backed gilts or you can sit it in cash in a high interest account.
  • Once your UK pension has been transferred, you avoid all UK taxes. Avoid 55% tax upon death when taking your pension income and avoid UK income taxes on that income.
  • You can choose which currency to invest in. You can invest in GBP denominated funds, USD or EUR or most other currencies of your choosing.


Top Reasons to Invest in a QROPS

[list type=”large-tick”] [li]No 55% tax upon death and no UK income taxes of 20% – 45%[/li] [li]Choose the currency of your pension – GBP, USD, EUR or other currency[/li] [li]Invest in the mutual funds, ETF’s, bond funds, property funds you want with 5* Morningstar ratings[/li] [/list]

QROPS Destinations. Where is My QROPS Transferred to and Why?

Why Gibraltar? Best all round solution. There is only a flat rate of 2.5% income tax. Enjoy 120% of Government Actuary Department (GAD) rates as a pension income. Invest in a wider range of investments and avoid all UK taxes.
Why Malta? Best solution if you live in Europe or one of the 65 countries which has a Double Taxation Agreement with Malta. There is a 25% withholding tax on income if no DTA exists and possible tax of up to 35% on income with no DTA. Otherwise, tax is 0% on income in most cases. 120% of GAD rates on pension income and a wide range of investments are available.
Why New Zealand? New Zealand pays out your pension with no tax on it. Avoid UK taxes upon death (55%) and UK income taxes (normally 20% – 45%). The money stays in New Zealand in GBP and is invested in a range of five strategies based on your risk level and take 100% of any increase in your pension pot after transfer, e.g. you transfer 100k GBP and it grows to 200k GBP. You can pocket the extra 100k GBP as a lump sum.
Why Isle of Man? This is the best choice if you have poor health or want a higher pension income. The biggest drawback is a 20% flat rate of income tax, although you avoid tax upon death. But, your pension income can be 50% higher than it would be in the UK dependent on many factors and a wide range of investments are available.


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