Insightful guide to QROPS by Rod Thomas FCA, Managing Director at http://www.avantiswealth.com

1. QROPS Guide
Understanding Qualifying Recognised
Overseas Pension Schemes
www.avantiswealth.com
THE RICHER RETIREMENT SPECIALISTS
RODTHOMAS INVESTMENT

2. Introduction
About Avantis Wealth
What is QROPS?
The Process
Considerations
FAQs
Find Out More
Contents
3
4
5
13
14
15
16
2

3. If you have a UK pension and now either
reside outside of the UK or plan to, you
can transfer your pension into a QROPS –
and access a host of benefits.
Put simply, a QROPS is an overseas
pension scheme recognised by HM
Revenue and Customs (HMRC) which can
accept a UK pension transfer. The benefits
of transferring your fund into a QROPS
include increased tax efficiency, total
investment freedom and large growth
opportunities – to name just a few.
“QROPS is an Overseas
Pension Scheme that can
accept UK pension transfers.”
As your pension is probably your
second most valuable asset after your
home, these benefits really matter, and
can dramatically improve your life in
retirement.
This demand for QROPS has been a
key factor in their development and
refinement, and so far over 30,000 expats
have transferred their UK pension into a
QROPS since the schemes were launched.
And with over 350,000 Britons leaving
the UK to begin a new life every year, the
demand shows no sign of slowing.
QROPS ability to simplify an individual’s
retirement has also helped. With a QROPS
it is much easier to move away from
outdated arrangements, and consolidate
numerous pensions under one roof.
Whatever your reason for considering
a QROPS, this guide is essential reading
to ensure you understand the benefits
and pitfalls of QROPS, and can make an
informed decision.
This Guide will explain what a QROPS
is, and outlines the advantages of
transferring. However, please note the
information contained within is generic.
Therefore if you have individual questions,
please contact an experienced financial
advisor by completing the GET ADVICE
form and receive advice tailored to your
unique circumstances.
“This guide will explain
what a QROPS is, outlines
the advantages and
considerations, and shows
you how you can benefit
from transferring your UK
pension.”
Introduction
3

4. Avantis Wealth is an
investment broker
specialising in high income
investments.
We provide our clients with investment
opportunities that will allow them to
achieve market leading returns from
their pensions, investments and savings,
potentially leading to greater financial
security and a better quality of life.
The company was created as a direct
reaction to the poor performance of the
conventional pension sector and our belief
that investments can offer high income
at low to mid risk. This model provides
investors with an alternative to poor
performance and the real opportunity
to improve their income either now or in
retirement.
Expert knowledge
Our team is certified in the products we
offer, so we know each investment inside
and out. We have the knowledge and
resources to give you all the information
you need to make the best decisions for
your financial future.
About Avantis Wealth
The F.R.E.S.H.
investment strategy
We use our F.R.E.S.H. criteria
developed by Rod Thomas FCA, to
select only the best investments to
offer clients. F.R.E.S.H. investments
satisfy the following criteria:
• Fixed returns – this means that
you know in advance the income
that you receive in years to
come.
• Regular high income – we
expect investments to provide
regular income, unless
compound growth is chosen.
• Exit strategy defined – getting
into an investment is easy.
We also want our clients to be
able to exit at the end of the
investment with no drama.
• Security – we require all
investments to be legally
secured.
• Hands-off – all our investments
are fully managed and require
zero involvement.
INVEST MENT
A
VANTIS WEALT
H
F.R.E.S.H.
For a no obligation
discussion in plain
English please click here
and complete the GET
ADVICE form to be put in
contact with us
4

5. UK pensions have traditionally been tied
up in many limitations and regulations;
partly to protect the UK’s tax revenues,
and partly to stop pensioners spending
their money too early in retirement and
later relying on the Government for
income.
The good news is that in 2006 HMRC
began a drive to simplify pensions, which
included the announcement that overseas
British pension holders could move their
pension fund into a QROPS – or Qualifying
Recognised Overseas Pension Scheme.
As the name suggests, a QROPS is a
pension scheme based outside of the UK
eligible to receive UK pension transfers.
What’s more, they give many financial and
investment benefits to the individual, such
as increased investment freedom, a lump
sum of up to 30%, and the ability to pass
on 100% of the fund to loved ones upon
death.
The five-year rule
The five-year rule refers to the length
of time the member has been resident
outside of the UK. It is measured in tax
years (and not calendar years).
The rule is important as it determines
when QROPS benefits can be taken. During
the first five years, benefits mirror those
available in the UK, such as a 25% lump
sum, and 55% tax on fund after death.
However, after being a non-UK resident
for five full tax years, your QROPS pension
follows the rules of that jurisdiction. This
means you can access up to 30% lump
sum, incur no UK income tax, no tax on
death, and access the host of other
benefits your QROPS offers.
“After five years, you can
access all the investment
and income benefits of your
QROPS.”
Rising numbers of people now spend a
quarter or even a third of their lives in
retirement, making it quite possibly the
holiday of a lifetime.
Transferring your fund into a QROPS
means you enjoy the best of both worlds
– receiving valuable tax relief whilst saving
for your retirement in the UK, without
needing to pay higher taxes when the
time comes to draw benefits overseas,
or submitting to the strict pension rules
which have to be followed in the UK.
What is QROPS
5

6. Needless to say, these opportunities are
subject to change. In the past certain
schemes – or entire jurisdictions – have
been delisted by HMRC for not following
QROPS rules.
This is why you need to connect to a
regulated QROPS expert who can complete
the necessary due diligence before any
transfer, and give comprehensive advice.
Please note you cannot transfer a UK state
pension or an annuity into a QROPS.
Pension comparison
To begin, here is a comparison of your two
pension options:
Keeping pension in UK
scheme
Transfer UK pension
into a QROPS
How much can I withdraw
as a lump sum?
Up to 25% Up to 30%
Is my pension income
taxed in the UK?
Yes No
Is my pension affected
by exchange rate
fluctuations?
Yes, as most accounts are
held in sterling
No
Are there limits to what I
can invest in?
Yes No, there is a wide range
of options
Can I pass on my scheme
when I die?
Not usually Yes, up to 100%
If I can pass on my
scheme is the fund taxed
on death?
Yes; up to marginal tax
rate of beneficiaries
No
6

7. “QROPS offer much greater
investment and income
freedom.”
QROPS Benefits
As mentioned above, QROPS
offer some significant
advantages no other type of
pension scheme can. The main
benefits are outlined below.
1. Remove the requirement to
buy an annuity
2. Easily pass on your wealth
3. Avoid inheritance taxes
4. A tax-free lump of up to 30%
5. Increased income drawdown
and greater flexibility
6. Greatly increased investment
freedom and opportunities
7. Tax-efficiency
8. Avoid currency exchange rate
fluctuations
9. The ability to base your
pension in one country whilst
you live elsewhere
10. Transparent charges
11. Benefits taken at age 55; or
sooner dependent on special
circumstances
12. Consolidate multiple
pensions into one easy to
manage scheme
13. No Lifetime Allowance (LTA)
charge
14. Avoid further changes to UK
tax and pensions legislation
1. Remove the requirement to
buy an annuity
Historically, 75% of a British pension pot
had to be used to buy an annuity – which
provides guaranteed income for the rest
of your life.
The downside is yields are low, subject
to income tax, and when you die, your
pension fund dies with you.
Many outdated pensions automatically
default into an annuity or similar at a given
time.
But by transferring your UK pension into a
QROPS, this danger is avoided, and upon
death any funds that have not been used
to provide you with income is passed onto
your loved ones.
“Pass on 100% of your
pension to your loved ones.”
2. Easily pass on your wealth
As you nominate your beneficiaries when
you transfer your fund into a QROPS,
passing your wealth onto your loved ones
is usually easier, faster and less stressful
for your family than with a UK pension.
Yet, when it comes to passing on your
wealth with a QROPS, there is another,
huge benefit:
7

8. 
3. Avoid inheritance taxes
of up to 55%
Inheritance tax (IHT) is assessed on
the total, worldwide assets of people
domiciled in the UK.
Even if you are resident overseas, if HMRC
can establish Britain was the country you
regarded as home at the time of your
death, your UK pension would be subject
to IHT.
UK pension funds being passed onto
beneficiaries will incur an IHT charge of
55%. However, this deduction does not
apply to QROPS; where your funds can be
passed onto your loved ones free from tax
at source.
4. A tax-free lump of up to 30%
Many QROPS allow up to 30% as a tax-free
lump sum; as the scheme only needs to
keep 70% of the original transfer pot as
retirement income.
In the UK, the cash lump sum is limited
to 25%.
This benefit alone is one of the most
popular reasons expats transfer their UK
pension into a QROPS.
An experienced financial advisor can
explain this in depth, ensure that 100%
of your fund can be passed to your
beneficiaries, and help you to plan for your
succession.
“Receive 30% of your fund
as a tax-free lump sum.”
5. Increased drawdown income
and greater flexibility
If you transfer your UK pension into a
QROPS, when you have been a non-
resident of the UK for five years, you
can take advantage of significantly more
flexible income drawdown rules.
The drawdown amount on UK pensions is
calculated using the Government Actuarial
Department (GAD) rates. These rates are
currently at their historical lowest.
With a QROPS, the jurisdiction’s rules allow
the trustees to use a different calculation
then the UK GAD. This can allow for
income to be up to 50% greater than a UK
pension.
A QROPS will also avoid UK income taxes
which typically range from 20% to 50%
depending on how large your fund is.
Therefore by transferring your UK pension
into a QROPS a higher income – and a
dramatically more comfortable retirement
– can be achieved.
An experienced financial
advisor can explain
this in depth, ensure
that 100% of your fund
can be passed to your
beneficiaries, and help
you to plan for your
succession.
8

9. “QROPS: Increased, and more
flexible income.”
6. Greatly increased investment
freedom and opportunities
One of the most significant ways in which
QROPS are superior to UK plans is in their
investment choice – which is usually very
wide indeed.
To highlight the differences, UK
stakeholder pensions have low investment
charges, but tend to offer a limited choice
of funds. Conversely, traditional UK
personal pensions tend to offer a wider
choice of funds than stakeholder schemes,
but can carry hefty charges, particularly on
older, outdated plans.
What you may not know is that both these
UK pensions are usually run by insurance
companies. This means you are only
investing in a small selection of funds that
are either run by the insurance company
itself – or possibly a limited selection form
associated fund managers.
So if you require access to the best
fund managers in the market and an
unparalleled variety of asset classes, a
QROPS is an infinitely better choice.
A world of choice
QROPS offer the widest possible choice of
investments, allowing you, your financial
advisor or investment manager to pick
from a range of asset classes across the
global market.
There is also no limit to the size of funds a
QROPS can hold, meaning when you have
transferred your fund, you can continue to
grow it as you see fit.
“What’s more, both your
contributions and the fund
itself can grow free from
capital gains tax.”
With a QROPS, both your contributions
and the fund itself can grow free from
capital gains tax.
So if you wish to escape from mediocre
performance, the cripplingly high fees
of UK pensions and take control of your
future, a QROPS cannot be ignored.
9

10. Keeping pension in
UK scheme
Transfer UK pension
into a QROPS
Collective investment funds
Unit trusts No Yes
Investment trusts No Yes
Open Ended Investment
Companies (OEICs)
No Yes
Exchange Traded Funds (ETFs) No Yes
Insurance company funds Yes Yes
Stocks and shares
Individual UK shares (equities) No Yes
Overseas equities No Yes
Gilts No Yes
Bonds No Yes
Futures and options No Yes
Permanent Interest Bearing
Shares (PIBS)
No Yes
Other
Cash and deposit Yes Yes
Traded endowment plans No Yes
Commercial property and land No Yes
Loans No Yes
Here is a comparison of which
investments you can choose:
10

11. 7. Tax efficiency
Many countries impose lower taxes on
income than the UK; including on pension
income.
Depending on where you live, you can
therefore receive income from your
retirement fund at substantially lower tax
rates than would apply in the UK.
8. Avoid currency exchange
rate fluctuations
A UK pension pays out in sterling
regardless of where you live, so you
face complicated timing issues to make
the best of changing currency rates. In
addition, investing in international funds
can add costs due to currency conversion.
However, because a QROPS can invest and
pay out in most major currencies, you:
1. Reduce the effect of exchange rate
fluctuations,
2. Avoid the hassle of timing transfers to
get the best rate, and;
3. Can choose your FX broker to receive
the best rates.
9. The ability to base your
pension in one country whilst
you live elsewhere
By transferring your UK pension into
a QROPS your scheme can either take
advantage of the tax rules where you live
– or a different low-tax jurisdiction which
has increased benefits.
For individuals who might move between
countries, or are moving in the future,
multi-jurisdictional schemes are also
offered by some providers. They allow
your QROPS to move between jurisdictions
to maximise its efficiency without
additional charges.
“Multi-jurisdictional schemes
allow your QROPS to move
between jurisdictions as you
do; and maximise efficiency.”
10. Transparent charges
One of the main disadvantages of UK
pensions concerns confusing charges
found in outdated schemes. When these
charges come into effect they can put a
serious – and wholly unexpected – dent in
your retirement.
By transferring your UK pension into a
QROPS however, your advisor can clearly
outline the applicable charges so you can
see exactly where your money is going – a
factor strengthened by the fact UK pension
charges are usually percentage based
whilst QROPS enjoy a fixed fee.
11. Benefits taken at age 50; or
sooner dependent on special
circumstances
There is generally a large amount of
flexibility on when to take your QROPS
benefits.
Usually you will begin taking income
between 50 and 75 years of age; but it is
possible to access your funds both before
and after these birthdays (i.e. in special
cases such as ill health).
For more information regarding your
circumstances or needs, please complete
our GET ADVICE form.
11

12. 12. Consolidate multiple
pensions into one easy to
manage scheme
With a QROPS, you can consolidate any
number of UK pension funds into one
larger, easier to manage plan.
This allows all your hard earned pensions
to benefit from improved investment
choice, and overall you will save on
charges and maximise growth.
You also benefit from having one plan for
all your retirement provisions, and one
point of contact; making managing your
retirement fund much easier.
“Aconsolidated fund means
you can save on charges and
maximise growth.”
13. No Lifetime
Allowance (LTA) charge
In the UK, there is a lifetime allowance
(LTA), which sets a limit on the amount of
tax relief you can receive before additional
taxes. Currently £1.25 million for the
2014/15 tax year.
This applies to all your pension savings. So,
if your total pension fund exceeds the LTA,
you could be hit with a 55% charge on the
excess.
However, if you transfer your fund into
a QROPS you will not be taxed – even if
your fund grows beyond the LTA after the
transfer.
Please note, if your UK pension is above
the LTA and you transfer into a QROPS
there will be a tax charge.
14. Avoid further changes to UK
tax and pension legislation
Once in a QROPS, your fund is safe from
the ever- changing rules and regulations in
the UK.
This includes the possibility that before
long, the ability to transfer your fund
into a QROPS could itself be scrapped
– something we talk about more in the
Considerations section.
This is by no means the complete
list of QROPS benefits. You also have
the advantage of protection against
possible future creditors – depending on
your QROPS jurisdiction – and greater
confidentiality than if you left your pension
in the UK.
To find out about all the benefits inherent
in QROPS which are applicable to you,
please use the Contact Form.
12

13. The following outlines how long it
may take to transfer your pension
into a QROPS.
These times can vary, and depend
on the speed information is given
to your financial advisor by your
existing pension provider.
The Process
1st Week
• You submit an enquiry
• Your advisor sends you a Letter
of Authority to complete – so they
can speak to your current pension
provider on your behalf
2-4 weeks
• You email or fax the Letter of
Authority and send the original
• Your existing pension provider is
then contacted to confirm its value
and check it is eligible to transfer
5-8 weeks
• You complete the application forms
• A discharge form is sent to your
existing provider, and an application
form is sent to the chosen QROPS
provider
• Your pension is then transferred
into the QROPS – providing tax-
efficient income in the currency of
your choice with a wide range of
investments to choose from
Letter of Authority
This letter is an authorisation from
you which allows your adviser to
gather information about your UK
pension.
Please note this letter is not binding
in any way and does not constitute
an authority to make changes to or
transfer the scheme.
13

14. QROPS are not right for
everybody. However, for most
UK pension holders a QROPS
can be significantly beneficial,
so long as the following
factors are considered
carefully:
1. Less investor protection
Some low-tax countries provide less
investor protection than the UK – i.e.
there is less regulation of financial service
providers. This regulation gap
is a particular worry to pensioners and
those approaching retirement who can be
targeted by ‘pension busting’ scams.
This makes it all the more important for
you to take advice from experts who are
authorised by the UK authorities and
experienced in your future jurisdiction.
2. Incorrect jurisdiction/scheme
may be chosen.
There is the possibility the right scheme
may not be chosen for you. In addition, if
you wish to take an active role in deciding
where your fund is invested you will need
to be sure that your QROPS allows you to
manage your own funds.
3. Too good to last?
Lastly, as a QROPS allows individuals to
build up substantial pensions with tax
relief then later avoid paying British tax on
pension income, some experts believe the
benefits of QROPS are simply too good to
last. They believe HMRC may, in the future,
decide to alter or completely remove
QROPS (as happened with the delisting of
Singapore’s schemes).
Considerations
14

15. Are all QROPS the same?
Definitely not! Differences include when
you can access the tax-free lump sum, how
much you can take as income, and the
costs. This is why it is imperative you take
expert, independent advice – so you learn
the best option for your unique needs and
circumstances.
Who can transfer their pension
into a QROPS?
Anyone with a UK pension can transfer
their fund into a QROPS – providing they
have not bought an annuity. However,
considerations such as any pension
benefits, the total amount in your pension,
and where you are currently a resident all
need to be considered in detail, meaning
you must speak to an advisor.
Can I take 100% of my QROPS
fund as a lump sum?
No, as your retirement fund needs to
be able to provide income for you for
the whole of your retirement, HMRC has
set the lump sum limit to 30%. Some
jurisdictions do allow additional payments
however. You should speak to an advisor
for more details.
I may go back to the UK in the
future, can I still benefit?
If you transfer your fund into a QROPS and
return to the UK after five years, there is
no obligation to transfer your fund back
to the UK. In fact, there are significant
advantages – such as only being taxed on
90% of your pension income.
I have a UK SIPP and I have
already drawn some income –
can I benefit?
Even if benefits have already been taken,
you can transfer most registered UK
pension schemes into a QROPS.
A QROPS can be described as an advanced
SIPP – in that it allows you all the same
investment freedom but the ability to base
your pension outside of the UK.
Can I transfer and set up a
QROPS myself?
Usually no – although some QROPS ‘lite’
versions can be set up by the individual.
However a QROPS ‘lite’ means you will
miss out on whole of the market advice, an
expert review of your financial situation,
recommendations that span the entire
QROPS market, an overview of the
investment options available to you and a
thorough examination of the QROPS most
suited to your needs.
In addition, the better QROPS require
regulated financial advisors to handle the
transfer.
FAQs
15

16. Gemini Business Centre
136-140 Old Shoreham Rd
Hove BN3 7BD
United Kingdom
+44 1273 447 299
0800 612 0880
invest@avantiswealth.com
www.avantiswealth.com
Find Out More
DISCLAIMER
Avantis Wealth Ltd is not authorised or regulated by the Financial Conduct Authority (FCA).
Avantis Wealth Ltd does not provide any financial or investment advice. We provide a referral to a regulated advisor who will offer appropriate advice, or to the company
offering an investment who will determine your suitability for the investment prior to any offer being made. We strongly recommend that you seek appropriate
professional advice before entering into any contract. The value of any investments can go down as well as up and you might not get back what you put in. You may
have difficulty selling any investment at a reasonable price and in some circumstances it might be difficult to sell at any price.
Do not invest unless you have carefully thought about whether you can afford it and whether it is right for you and if necessary consult with a professional adviser in
accordance with the Financial Services and Markets Act 2000. These products are not regulated by the FCA or covered by the Financial Services Compensation Scheme
and you will not have access to the financial ombudsman service.
Information is provided as a guide only, is subject to change without prior notice and doesn’t constitute an offer of investment. Some investments may be restricted to
persons who are high net worth, sophisticated or professional investors or who take independent advice from an authorised independent financial advisor.
VERSION: QG-1.0 02/12/14
Do you have a frozen or
underperforming pension?
Then request a complimentary
pension review.
This will show you:
• Value of your fund
• Performance over the last 5-8 years
• Fees and charges you are incurring
• Expected income in retirement
Armed with this information you can
explore options to do better.
CALL OR EMAIL US NOW!
Avantis Wealth Gold Membership
You can keep up-to-date with all things
Avantis Wealth simply by registering as
a Gold member on our website at
www.avantiswealth.com there is no
cost and once registered you’ll be sent
complimentary special reports together with
our monthly F.R.E.S.H. Investment newsletter.
THE RICHER RETIREMENT SPECIALISTS
üü Website access all areas
üü Fresh Investment newsletter
üü Investment fact sheets download
üü Invitation to webinars
üü Complimentary special reports
üü Complimentary pension review
(value £295)
üü Free seminar attendance
üü Pre-launch new investment
notifications
üü Invitations to investment dinners
üü Pension & Investment hotline
– your questions answered
Gold membership benefits: