SJP Qualifying Recognised Overseas Pension Scheme (QROPS)
In recent years, there have been many changes to the UK pension legislation. So, if you currently hold a Qualifying Recognised Overseas Pension Scheme (QROPS), now is the time to check if it is still helping you meet your retirement goals.
Since the introduction of QROPS, it has gained popularity amongst expatriates who see it as an alternative to their UK pension scheme, offering a wide range of flexibilities and options. Transferring a UK pension to a QROPS can indeed provide flexibility along with tax benefits and a wider range of investment options.
What do you need to know?
As a non-UK resident, you may have transferred your UK pension savings to a QROPS for various reasons, such as reducing inheritance tax implications, getting around the UK’s pension limits, or taking advantage of more tax-efficient options. However, with frequent changes to pension legislation, it is crucial to ensure that your current arrangements are still suitable for your needs.
If you have an existing QROPS, we invite you to take a short quiz to find out more.
Advantages of QROPS
When QROPS was introduced, one of its key advantages was the flexibility it offered UK pension scheme members in choosing the jurisdiction for their QROPS. It allowed them to choose a jurisdiction that might not necessarily be where they currently live or plan to live.
As a result, advisors would typically recommend jurisdictions that offer the greatest benefits to their clients. However, as UK pension legislation evolved, some QROPS schemes and jurisdictions were delisted by HMRC for not complying with the intended rules and benefits. Nonetheless, the decision to transfer UK-registered pension funds into a QROPS continues to come with substantial advantages, including increased tax savings, decreased currency exchange risk, improved lump sum advantages, and greater investing freedom. Despite new policies announced in the 2023 UK budget*, QROPS remains a reliable protection against these limits.
*Some of the changes announced at the 2023 UK budget on 6 April 2023 include the abolition of the lifetime allowance (LTA), the LTA charges, the limit on tax-free cash, which remains at 25% (before 6 April 2023), or £268,275.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than you invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances. You are advised to seek independent tax advice from suitably qualified professionals before making any decision as to the tax implications of any investment.