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QROPS UK pension Transfers • info

Qualifying Recognised Overseas Pension Schemes -



It was announced in April 2006 that British ex-patriates would be able to
move their pension benefits to a QROPS with the UK revenue’s approval.

QROPS (Qualifying Recognised Overseas Pension Schemes) was launched by the
British Government as a way to make ex-patriate retirement easier for Britons.
It effectively allows Brits to retire abroad while taking their pensions with

In simple terms, this means that anyone who now lives overseas, or is
intending to leave the UK long-term, can transfer their existing pension plans
into a QROPS.

Currently, the minimum retirement age of 55 will still normally apply before
benefits can be taken. However, the QROPS can offer considerably more
flexibility, tax benefits, greater income potential and investment freedom
compared to a UK pension.

QROPS may be used to receive transfer values from UK registered pension
schemes which can include Protected Rights funds. This may also apply to those
already receiving benefits from a UK Self-Invested Personal Pension Scheme

Most of the QROPS schemes are not taxed at source, however the tax applicable
to any income will depend upon where you are tax resident at the time.


QROPS Benefits

Comparison Between UK Pensions and QROPS


UK Pension:-All income tax derived from a UK pension is
taxed at source.

QROPS:- Can significantly reduce
the amount of income tax, in some cases to zero.


QROPS Can Be Passed On To Your Beneficiaries Upon Death



UK Pension:- Income drawdown (until 75th
birthday) available but only in Sterling and normally subject to minimum pension
pot of £100,000.

QROPS:- May allow flexible
‘income drawdown’ known as ‘unsecured pension income’ to continue after age 75,
also allows you to alter amounts and currencies.


UK Pension:- If you die with a UK pension
scheme your spouse can get up to 2/3rds of the pension you would have received
(dependent upon the scheme). If you both die your pension WILL die with

QROPS:- All of your pension
passes to your nominated beneficiaries in full, TAX FREE, and not a windfall for
the pension company or the tax man.


UK Pension:- Any asset left upon death to
your beneficiaries (except your spouse) will be subject to UK Inheritance Tax
currently at 40%.

QROPS:- No UK Inheritance Tax
charge upon death.


UK Pension:- Can be limited to the
insurance companies choice of funds or an outsourcing of fund managers, you have
no control of the pension fund.

QROPS:- You have greater
investment freedom as you have full control of the investment choices as well as
the currencies you wish to invest in.You may invest in onshore
/ offshore funds, fixed deposit rates, total diversification.


UK Pension:- You are restricted to the
amount of income and the currency received.

QROPS:- You may take an income of
your choice, alter your income at any time, take capital amounts at any time and
in a currency of your choice (subject to scheme rules).


UK Pension:- You have none!

QROPS:- Protection against
possible future creditors. (Dependent on jurisdiction of QROPS).


UK Pension:- You have none!

QROPS:-  Protection against
ex-spouses, business partners and creditors.



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