A financial insight on the benefits and rules of a Qualifying Recognised Overseas Pension Scheme.
If you have ever heard of QROPS, it is likely that you recognise that it can be highly beneficial when building a pension pot for retirement, but what about the possible downsides? Like any investment option QROPS, or a Qualifying Recognised Overseas Pension Scheme, should be researched to make sure that it is right for you before taking the plunge.
Under current HMRC rules, overseas pensions are allowed as long as they are recognised by them and qualify under their criteria. Firstly, not all overseas pensions schemes conform to QROPS. However, those that do tend to be popular because they offer flexibility with both the primary currency used and the type of investment being made. Furthermore, they tend to offer certain tax advantages when the pension is drawn upon at retirement. There are also certain tax gains for beneficiaries who can be nominated in the event of the death of the pension holder.
Bear in mind that pension funds which are left in the UK are taxed at anything up to 45 per cent and that transferring a UK pension fund into a QROPS can often reduce the amount of tax that is due. However, certain residency and other issues tend to come into play, so there is no simple action that can be advised that is suited to all. Bearing this in mind, it important to receive financial advice so you can be clear on your personal options. Download the QROPS: Why You Should Choose A QROPS Approved By HMRC PDF for all the information you need to help you to choose the right pension plan for you.
Download: QROPS: Why You Should Choose A QROPS Approved By HMRC
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