http://www.wealthmanagementhongkong.com/ What Are QROPS Qualified Recognized Overseas Pension Schemes Hong Kong Hong Kong QROPS expert Gary Williams answers your FAQ regarding QROPS Pensions for UK British Expats in Hong Kong.
What are qrops qualified recognised overseas pension schemes rules
4. What is the minimum value I can transfer to a
QROPS?
• In our experience the better schemes require
funding of around 50,000 GBP. However, there
are similar schemes available from 25,000
GBP. Whatever your situation, and UK pension
transfer value, contact us anyway as there is
usually a solution to be found.
5. Will payments from my QROPS pension fund be
reported to HMRC in the UK?
• QROPS providers are required to notify HMRC of
any payments from transferred pensions in
respect of a relevant member during the initial 5
years from the time the member ceased to be an
ordinary resident of the UK for tax purposes.
• And in the event that the member becomes an
ordinary resident for tax purposes in the UK;
when the payment is made.
6. If I transfer my UK pension into a QROPS will I
have to buy an annuity?
• No, although you may if you wish. Without
the need to purchase an annuity it means you
can invest into wide ranging assets, and gain
the advantage of passing any remaining funds
upon your premature death to your loved
ones. Without any liability to the UK Pension
Tax at 55% or UK IHT at 40%.
7. Who may apply to transfer their pension into a
QROPS?
• Most of the schemes are not available to US
citizens and there can be problems with US
residents; however any other nationality may
apply.
8. What investment choice and freedom will I have
with a QROPS?
• The investment choice will normally be very wide
indeed. Under certain circumstances you can
manage the assets yourself with total freedom, or
work with an investment manager / financial
adviser.
• You may also appoint an investment manager to
make the decisions for you or with you. It really
depends what you are looking to achieve and
how involved you would like to be with the
investment decisions.
9. • We can arrange for an investment adviser to
work with you by reviewing your QROPS fund
assets and make recommendations to you on
a quarterly basis.
• There is no limit to the size of funds that may
be accumulated within a QROPS; and a QROPS
is exempt from the UK Lifetime Allowance (the
maximum value of the underlying fund; before
tax on any excess becomes liable; currently at
a tax rate of 55%).
10. How & when can I take benefits from my
QROPS?
• Typically there is considerable flexibility in the
timing of taking any benefits from a QROPS.
Usually benefits will be taken from the age of
55, but it can be possible to access funds
before or after these ages. Please contact us
for further information dependent on your
circumstances.
11. Once I’ve transferred my UK pension to a QROPS
can I access my fund as a 100% lump sum?
• Unfortunately the answer here is 'no'. This is
because the funds that you have built up
(after taking your TAX FREE lump sum) are
required under the current QROPS / HMRC
rules to provide an income for you and your
dependents for the rest of your life, and
perhaps beyond.
12. How will any benefits or withdrawals be taxed?
• Most of the schemes we recommend the
pension income is paid GROSS (TAX FREE).
The tax treatment of any income you receive
will depend upon where you are tax resident
at the time. (Note: we recommend you seek
individual tax advice regarding your particular
circumstances).
13. What will happen to my QROPS pension fund
upon my death?
• Typically – and a major benefit of a QROPS – is
that the remaining value of the fund is paid
directly to your beneficiaries. Without any
liability to the UK Pension Tax at 55% or UK
IHT at 40%.
14. I may go back to the UK in the future, can I still
benefit?
• QROPS are for people whose intent is not to
return to the UK in the future. However if this
is some time away – say 10 years plus - then
you may still want to consider a QROPS as the
benefits of ownership are substantial. Please
contact us to discuss your particular
circumstances.
15. I have a UK SIPP and I have drawn an income,
can I benefit?
• A QROPS can be used to receive transfer values from
any UK registered pension scheme whether this is for
example a Personal Pension Plan (PPP), a Self
Invested Personal Pension Plan (SIPP), a Small Self
Administered Pension Scheme (SASS), or an
Occupational Scheme whether it's a Money Purchase
Scheme or a Final Salary Scheme – all can be
transferred to a QROPS.
• However if the pension scheme benefits have or are
already being taken, then it is not possible to
undertake the transfer.
16. How long will a transfer to a QROPS take?
• Most transfers can take 2-3 months. The process
is initiated by you completing a letter of authority
enabling us to get the relevant information from
your existing pension provider; for example the
current benefits and a transfer value. This is not
binding in any way, and will only allow us to
receive the details regarding the pension scheme
that you have. However it will allow us to provide
you with individual expert independent advice
reflecting your personal individual circumstances
and future plans.
17. Can I transfer funds and assets in my UK scheme
or do I have to liquidate them into cash?
• This will depend on the pension provider you
have, and the assets that you hold. Generally
a transfer will be quicker if converted into
cash. Please contact us to discuss your
particular circumstances.
18. What are the key facts to look for in a good
QROPS?
• Strong investor protection from a well
established jurisdiction similar to the UK,
investment protection, transparency of
charges and tax efficiency.
19. My pension fund is substantial, what tax
implications may there be?
• A transfer to a QROPS will be a benefit
crystallization and therefore will give rise to a
tax charge if the amount exceeds the lifetime
allowance (currently £1.8 million in the 2011
tax year). If your fund is in excess of this
amount then please contact us for specialist
advice.
20. Are there any circumstances in which I shouldn't
transfer to a QROPS?
• Yes there are, although in most situations we
have come across so far, as long as you are a
non UK resident and intend to remain so the
benefits to you can be immense.
• If you have guaranteed annuity rates set many
years ago when interest rates were much
higher, this would be one such situation that
would need careful consideration and advice.
21. Can I organize a QROPS myself?
• No. QROPS providers will only take pension
transfers through their appointed intermediaries.
• We are appointed intermediaries; and as such we
can provide you with all of the information, and
the independent financial advice that is necessary
for you to make an informed choice as to
whether a QROPS is right for you.
22. • We can also take care of all of the paperwork;
making the transfer as easy as possible for
you.
• If you feel that you would like to find out more
about QROPS and whether they are right for
you. Then why not take the opportunity to
talk to the market leader in QROPS advice.
Simply call us on +852 5308 3732 - we look
forward to talking with you soon.