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QROPS (ROPS) FAQ

QROPS (ROPS) are one of the most talked about topics among expats thinking about their financial options. We have sourced the answers to some of the more frequently asked questions around QROPS.

Written on 20 July 2022

Do I need to transfer my pension to the same country I am retiring to?

No. It is more important to find the optimal jurisdiction for your QROPS (ROPS) than finding one in the country you retire to. However, if you were to transfer a pension to a country you are not resident it, it could exposure you to a transfer tax levied by HMRC

Will I pay any more taxes on my pension after the QROPS transfer?

It will depend on the country you live in. The QROPS will grow tax free and then the income tax you pay on drawdown depend on the laws of the country you live in and whether they have a Double Tax Agreement with the jurisdiction in which the QROPS is held. Typically, you can set up your pension income in a tax efficient way where you can avoid most or all taxes on your income. Also, if anything happens to you, the entire pot gets passed on to your loved ones. 

Do I need to be offshore to move into a QROPS?

No. If you live in the UK and intend on retiring or moving abroad, you can move your pension into a QROPS today. However, you need to be offshore for 5 years to get the full benefits of a QROPS. The advantage of moving today is avoiding any future tax increases in the UK concerning pensions or any closing of loopholes or changes in regulations.

When can I draw my pension?

With recent changes in legislation most QROPS providers will allow the same 25% as the UK, however older more established QROPS in certain jurisdictions can allow you to take up to 30% as a lump sum. You would need to speak to your current provider to see if you qualify. You can then draw on your pension from 55.

What happens if I move back to the UK?

If you move back to the UK, your QROPS would lose all of its benefits and would refer to the normal rules for a UK SIPP.

Can I cash in my pension and get a 100% lump sum?

There are some schemes on the market that claim to offer a 100% lump sum, this is generally against the spirit of the pension rules and it important to be aware that such schemes are actively under scrutiny and review. Making use of such a scheme may leave you open to a retrospective claw back of up to 55% of your pension.

Can I move my residential properties into a QROPS?

No. QROPS only allow commercial properties such as shop houses, B&B’s, guesthouses and hotels. However, if you need QROPS help in this regard, you can move into a QNUPS.

What happens if I already have a QROPS?

Although QROPS can work for a number of people, QROPS suitability is often called into question.  For many years, commission driven sales people have recommended a QROPS to provide greater flexibility for the sale person to generate higher than average fees through commission both through the structure established and when using certain investments that incentivise the sales person to sell their products. QROPS previously did not offer the same scrutiny a UK Pension Trustee would do on the recommended underlying investments. 

Can I move a QROPS back to a UK Pension?

Yes, even QROPS which are no longer considered to meet UK rules and have been removed for new investors (de-listed QROPS) can move their pension back.

Things to consider:

  • Exit fees applied by the Trustee (if any)
  • Exit fees applied by your underlying investment custodian
  • Penalties applied by underlying investment funds
  • New UK provider who will allow for a transfer back, for non-residents

What expats say about our experts

The advisor was excellent in giving clear and useful advice. I have already recommended him to another friend who is an international teacher who is seeking to invest her money.

Seema M. Hungary, QROPS