Qrops Questions

Are you considering getting QROPS? Transferring your pension into an overseas scheme can seem complicated, and getting the details right is important. A good QROPS adviser should explain your options to you so that you can make an informed decision. For extra clarity, here are some questions to ask:

How much tax will I pay?

Transferring your UK pension into a foreign one frees it from UK income tax, but you will be liable to whatever taxes your new country of residence may impose. There is therefore a risk of jumping out of the frying pan into the fire. However, if your QROPS adviser is not a tied agent and has access to the whole of the market, he will be able to shop around fro a jurisdiction that does not levy high taxes on pensions.
If you live in a different country to where your QROPS will be based, you need to take into account the tax systems that exist in both the country that hosts your QROPS and your country of tax residence. Make sure that you know whether the QROPS hosting country pays your pension gross or whether any funds are withheld.

How much are the fees?

Given the proliferation in QROPS schemes that has occurred in the past four years, QROPS providers have found that they can no longer name their price for fees and charges. The competition that exists in the growing market means that there are some good deals to be had.
If your QROPS adviser is part of a large chain of IFAs, you may find that they can negotiate discounts on providers’ standard rates. As with other financial products it follows that a bespoke scheme tailored to your individual needs is likely to command higher fees than an off the peg product.

What can the scheme buy?

Some investors have strong preferences about the underlying assets that they want to drive their pensions. Other sprefer to let fund managers pick and choose what should make the fund grow.

How can I pass it on?

Often overlooked, the inheritance consequences of a QROPS are an important feature. Some jurisdictions are more favourable from this point of view than others, so this is a consideration to be weighed up alongside the likely investment returns and tax consequences of a particular scheme.

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License