Qualifying recognised overseas pension scheme. A QROPS is a foreign pension scheme that is capable of receiving transfer in from UK registered pensions. The taxation treatment is based on the country where the QROPS is registered but often an individual will end up paying little or no tax at all on the income received from the pension fund. For example, there is no income tax charged on income eceived on QROPS registered in Guernsey. Paying less tax is the main advantage of a QROPS scheme. This is particularly true for someone who has built up a considerably large pension fund who has enjoyed tax relief on contributions in the UK, and will pay relatively no tax on the income received. In addition to this, there are options for the fund to be passed to beneficiaries without an inheritance tax charge in the event of death. There are no investment restrictions and the member can receive more than 25% tax free cash when the fund is crystallized
Not everyone can qualify to register a QROPS scheme however. The individual applying must not intend to be UK resident in the future, meaning that QROPS is ideal for a UK resident who intends to retire abroad.
Main benefits of QROPS:
1. Less tax paid on income received
2. Can pass funds to heirs without IHT or other tax charges
3. More than 25% tax free cash (depending on jurisdiction)
4. No Lifetime allowance charge
5. No obligation to purchase an annuity
6. Investment freedom
Receiving financial advice offshore
There is no regulation of financial advice outside the UK meaning there is zero protection and no equivalent of the financial ombudsman is you wish to lodge a complaint.
Ex Pat Taxation
In order to be non resident in UK for tax purposes, ie, stop paying UK tax an individual needs to be out of the uk for a whole tax year; 365 days. After which tax maybe due in their chosen country. To ensure your remain non uk resident, you must ensure that you do not spend more the 183 days in the uk in any given tax year or 90 days a year on average over the period of non-residency.