Paul Davies, director at Global QROPS, said interest in QROPS has continued despite HMRC’s backtracking, leading many to initially believe that the schemes would become less appealing, especially in lieu of the relaxation of death tax rules on UK pension pots.
“Enquiries and interest in transferring to QROPS continues and whether this is the best option does largely depend on a client’s circumstances,” he said. “If UK pension members are retiring abroad, advisers would need to look at both QROPS and UK pension options as part of their client’s retirement planning advice, as always.”
Advantages and disadvantages
Christopher Wicks, managing director at Bridgewater Financial Services, said he has provided a UK pension transfer specialist service to a growing number of firm of financial advisers in the UK and overseas now that it is mandatory for defined benefit transfers above £30,000 to be subject to advice.
“QROPS can provide a greater lump sum payment for expats who have been non-UK resident for five or more years. They are also outside the scope for lifetime allowance and this makes them particularly useful for people with very large funds whether they are UK residents or expats,” he said.
However, he added that UK pensions also have benefits over QROPS: “UK schemes can be paid gross where the expat resides in a country that has a double taxation treaty with the UK. The new flexibility rules have not been fully extended to all QROPS jurisdictions and death benefits are also pretty tax efficient pre age 75.”
