With over 3000 QROPS on the HMRC list, there is an extensive choice for anybody considering transferring their UK pension overseas. Leading places where you can transfer your pension to include Malta, Australia, New Zealand and Guernsey. Other QROPS jurisdictions include the Isle of Man, Hong Kong, Ireland, Canada and Cyprus.
Each QROPS location will have different rules and regulations, and each QROP scheme will have different investment options and fees. So apart from finding a QROPS that clearly fits in with the local and HMRC rules and regulations what else needs to be considered:
Where you are resident will have a major impact on where you should transfer to. In a worrying high number of cases, we have seen individuals transferred to QROP schemes that are completely inappropriate from a local tax perspective. Special mention needs to go to clients resident in the EU, Australia, New Zealand and the United States.
Each QROPS location has different local rules, as well as different restrictions imposed by HMRC. This will impact on the income (minimum and maximum) as well as the capital lump sum that can be taken. Minimum and maximum retirement ages also vary.
If you intend to change your residency in the future a fully portable QROPS solution may be of high importance. What may be the most suitable solution now may not be in the future, and the ability to transfer free of charge between locations is important.
The local rules within each QROPS location dictate the allowable investment options. In addition some locations allow an individual can take control of their own investments, whilst in others an investment manager is required. Each QROPS location has some restrictions places on them by HMRC.
The importance of currency cannot be underestimated. An investment portfolio may perform extremely well, but any gains can be wiped out by extreme currency fluctuations. It is important that a selected QROPS allows you to invest and hold assets in your chosen currency.
There are many other key factors that need to be considered when choosing a QROPS. These include your domicile (or nationality), the residency and domicile of your children, your pension fund size, your age, protection, regulation, your other assets, personal objectives; and any strong preferences you may have.