What is a QROPS?
A QROPS is a Qualifying Recognised Overseas Pension Scheme
In April 2006, revised pension regulations became effective such that individuals with UK pension rights who have or will become non-resident in the UK for tax purposes could move their pension benefits out of the UK to a QROPS – with Her Majesty’s Revenue and Custom’s approval.
A QROPS is a flexible offshore pension arrangement that accepts accrued UK benefits for non-UK residents or those intending to leave the UK.
The rules of the scheme should, for the most part, correspond to the rules governing an authorised UK pension scheme. The trustees of the QROPS must report to HMRC information about certain events for five years from the QROPS transfer and if that individual was resident in the UK for tax purposes during the previous 5 years. The events include:
- The payment of benefits (lump sum, income and death).
- Onward transfer of the QROPS.
If the individual has been non-resident for 5 complete tax years or more HMRC no longer require information to be reported to them.
An individual may wish to establish the QROPS in a jurisdiction with favourable pension rules. Thereby it is possible to achieve significant tax and investment advantages when compared with a UK pension.
HMRC publish a list of approved QROPS: http://www.hmrc.gov.uk/pensionschemes/qrops.pdf
The Liberty QROPS is open to residents of Guernsey and residents of most other countries in the world. The Liberty QROPS may be of particular benefit for individuals who have left or are in the process of leaving the UK and have UK pension benefits that they wish to transfer.
Liberty QROPS is HMRC approved.