For some people, transferring a pension from the UK to another country is not too hard. Yet, this depends on where you live, your pension plan and financial situation. Here are some commonly asked questions about QROPS pension transfer to help remove some of the mystery from the process.
What Does QROPS Mean?
QROPS stands for qualifying recognized overseas pension scheme. It is designed to make it easier for UK residents planning to relocate in other countries. This scheme is in full compliance with all the UK laws and the laws of the countries it is accepted in.
What Happens If I Move Back to the United Kingdom?
This will depend on how long you lived in another country. If it has been less than five years, you will be responsible for all the taxes you would have paid, had you been living in the UK. However, after five years, there are no penalties involved should you decide to move back.
Can I Transfer My UK Pension to the United States with a QROPS?
The US does not allow for QROPS. This means it is not possible to make a QROPS pension transfer directly to the country. However, transfers can sometimes be made indirectly through countries which are allowed by the US. Yet, this depends on the country you use and their local laws.
May I Set Up My Own QROPS Transfer?
Transferring a pension is not always a simple matter and one should use an experienced financial professional for advice and assistance. However, there are special forms and kits a person may use for a “do it yourself” QROPS. Yet, you could be losing some of your best investment opportunities without the right kind of professional advice. Your financial service is up on all the latest regulations and has a complete understanding of the markets and this ensures there are no mistakes, so your investment remains sound.
What Benefits Does a QROPS Offer?
You may notice a number of important benefits, such as:
- Consolidation – maybe you have more than one pension to transfer. By using a QROPS, you can combine them all and make everything easier to transfer and manage.
- Investment options – with a QROPS, you enjoy a wide range of investment opportunities which allow you to explore new things if you like.
- Death benefits – once you make a QROPS pension transfer, when you die, 100 percent of your pension will go to your heirs. They will not have to pay any fees or taxes.