QROPS sales soar as growing concern lingers over policy changes
QROPS stands for Qualifying Recognised Overseas Pension Schemes which allows Expats living overseas to transfer their UK pensions to a more favourable tax jurisdiction. Since the UK referendum, there has been growing concern that the UK government may reduce the tax advantages available to expats or even remove QROPS all together.
Growing concern by the potential removal of QROPS benefits by QROPS trustees and wealth management firms have caused in influx in QROPS transfers. Current benefits for a QROPS can include the following:
- Removal of UK taxes.
- Increased Pension commencement lump sum (previously called tax free lump sum).
- Choice of currency including GBP, AUD, USD, EUR, NZD and all major currencies.
- Greater choice of investments.
- No UK inheritance tax.
What action is being taken?
Due to the rising debt levels in the UK, the government have the ability to reduce the debt levels by either increasing taxes or reducing government spending among other things. Pensions are usually the easiest attacking point which is now under even more scrutiny since the UK have voted to leave Europe. There has been talks of reducing the benefits available to QROPS, such as changes to how they are taxed including the amount of tax free lump sum a member is allowed. QROPS legislation changes have of course been changing every year since they began in 2006. So far, no changes have been made retrospectively.
Many Independent Financial Advisers are being forced to diversify their business away from QROPS in the case that it is removed completely. This concern has also lead to an increase in enquiries for people who want to transfer their pensions overseas. STM Group, one of the big players in QROPS, have reported the largest amount of sales in QROPS over the last 12 months.
What should I do now?
If you are an Expat living overseas and have a UK pension, it could be beneficial for you to look at your options to see if QROPS is right for you before it’s too late. We can recommend you the most suitable independent financial adviser given your request by filling out your details on our contact form.