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The launch of Qualifying Recognised Overseas Pensions Schemes or QROPS has redefined the way by which UK expatriates and those considering relocating abroad view their management of their personal pensions. Her Majesty's Revenue and Customs or HMRC launched the QROPS as a pre-approved process to enable UK pensioners living abroad to transfer their pensions to the country they are living in. Insurance companies, merchant banks or trust companies are the main providers of this pension scheme. They have to comply with a set of HMRC QROPS rules and regulations in order to establish these funds. There are specific roles on when the benefits can be availed of as well as requirements pertaining to reports that will cover five tax years following the member's departure from the UK. UK pensioners who are considering establishing this scheme are advised to carefully assess their pension and their own financial standing as not all pensions schemes overseas can qualify as QROPS. Fines and penalties may arise if an attempt is made to transfer one's pension funds into a non-certified overseas scheme. The best move is to seek Independent Financial Advice that is regulated by the UK Financial Services Authority or FSA. The pension advisory company must be recognized and accredited by the FSA to offer cross border assistance and education to pensioners. All of the leading QROPS providers will urge their customers to obtain advice in this manner. To be able to transfer UK pension funds to a QROPS the pensioner must be living abroad or must be planning to leave abroad for the purposes of taxation. Benefits transferred to a QROPS are not taxed by the UK government but rather the government of the pensioner's host country. A UK pension can be transferred into a QROPS before a member withdraws his pension benefit or even when they are accepting income from a pension. Most types of pension funds can be transferred to a QROPS save for the UK state pension. The pension cannot be transferred if the pensioner has already bought an annuity or is already receiving a Final Salary Pension payment. The advantages of establishing a QROPS is that the fund is no longer taxable under UK laws. The pension will be under the jurisdiction of the host country where the UK subject is living. Location of residence may impact taxation and so it is vital to investigate the tax regime of the host country first before establishing the pension scheme. After five years of residing outside of the UK, the reports required by the HMRC ceases. There are no restrictions on the amount of income taken at retirement after five UK taxation years. Holders of QROPS are no longer required to purchase an annuity. When the pensioner dies all the

benefits of the pension fund will transfer to the heirs free of tax. QROPS also provides pensioners the flexibility for investing their funds as they see fit and access their pension. With proper planning, QROPS can indeed be quite beneficial.

Article by Louis Gonzales for free information on QROPS and QROPS Pension matters

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==== ==== To get the best tax advice and establish a reasonable amount to pay each and a reosonble time scale to pay back what you owe contact us today ==== ====

Important HMRC guidelines