What are QROPS?

QROPS are designed specifically to meet the needs of expats living abroad.

A Qualifying Recognised Overseas Pensions Scheme, or QROPS, is an overseas pension scheme which is recognised by HM Revenue and Customs (HMRC), and into which a UK non-State pension can be transferred.

on-the-beachThe numbers of ex-pats moving abroad and the complex legislation which previously existed led to the creation of QROPS in 2006, to help expats choosing to move abroad to access private pensions into which they had paid during their time in the UK.

QROPS are available to anyone aged between 18 and 75 (70 in Malta) with a UK private pension fund who is either living permanently abroad or intends to do so within the next twelve months. Those who open a QROPS are likely to benefit from better tax efficiency pensions in the UK can be taxed by as much as 55%, and before the introduction of QROPS transferring a pension involved a hefty unauthorised transfer charge as well as more investment freedom and improved opportunities for capital growth.

However, the field of QROPS schemes is a complicated one, and the rules vary from country to country. In addition, the complexity of the regulations means that each case has to be looked at differently: the best solution for one person is not necessarily advisable for another, as needs, preferences, tax liabilities and other considerations vary not only from country to country but also from individual to individual. For this reason it is essential to consult a regulated and specialized QROPS adviser in order to ensure that the best use possible is made of the opportunities provided by the schemes.

During the first five years the benefits are the same as those in the UK: the maximum lump sum is 25% and there is a 55% tax on the fund in the event of death. However, these restrictions are lifted after this initial period and the rules are changed to meet those of the legislation in the territory where the QROPS is based.

A QROPS does not have to be established in the new country of residence, and this gives greater flexibility and stability. Many of these schemes are currently based in Malta, Gibraltar and the Isle of Man, as this gives better tax flexibility and more favourable terms, and any expat living abroad in any country can base their pension in these preferred locations.

If expats choose to return to the UK their QROPS are treated in the same way as any other UK pension plan, meaning that modifications may have to be made in order for them to comply with UK legislation.

Further information about QROPS:

History of QROPS, why were QROPS created?

Benefits of taking out a QROPS for ex-pat residents

The most frequently asked questions in reference to QROPS

How long does it take to set up a QROPS

What are QROPS?

QROPS jurisdictions. Where can QROPS be based?

Talk to us about your QROPS needs

What Our Clients Say:
“Probably the best solution ever to help my retirement fund produce a reasonable income. Excellent service from all concerned. Thank you.”
Mr. & Mrs. K., Oman

QROPS are available only for private pension funds:

State pensions and annuities are not covered. Irish Occupational Pension and PRSAs are eligible.

One benefit of QROPS schemes is that they allow lump sum payments of up to 30% and can be wholly passed on to loved ones when the pensioner passes away, without being subjected to tax.