PENSION TRANSFER

An increasing number of professionals of all nationalities have been moving and working abroad in the last decade. Whether you are a young executive or a high net worth individual with a diversified portfolio of global assets, you will have specific financial requirements and objectives. Offshore financial products and services can help you achieve financial security and provide you with the quality of life you require as an expatriate or international investor.

The offshore financial industry has become more popular and financial institutions from around the world have entered the offshore market as a result of the high demand. There are now many providers that offer a broad range of services ranging from saving schemes to pension and retirement plans and wealth management accounts to lump sum investment products.

Over the years, I has developed strong partnerships with some of the world’s leading investment houses and insurance companies, all of which offer some of the most competitive products in the marketplace and a high level of protection for the investor.

Once deciding to transfer your UK Defined Benefit (DB) Pension Scheme, you have two options to either transfer it to SIPP (Self-Invested Personal Pension) or QROPS (Qualifying Recognised Overseas Pension Scheme). I will guide you through which option to choose based on your existing pension scheme. Below are brief descriptions of the pension plans you can choose from.

SIPP (SELF-INVESTED PERSONAL PENSION)

A SIPP is a personal pension plan which is suited to the more sophisticated pension investor. There are very few restrictions on what you are available to invest your funds in, meaning that you will have complete control over your own funds. With a SIPP plan you are able to invest in property funds both in the UK and internationally. All assets within a SIPP fund benefit from IHT mitigation.

Investing within a SIPP can have great benefits for those who regularly pay into the fund, including:

  • Individuals can benefit from full tax relief on contributions based on an annual income of £150,000.
  • No need to purchase an annuity untill age 77 – the quasi-compulsion to purchase an annuity is currently under review.
  • In addition, prior to investing, the fund can be made available to your beneficiaries free of Inheritance Tax.
  • If you retire abroad you are able to move your SIPP to another jurisdiction using a QROPS scheme.
  • Have a wide choice of investment options available to you creating greater flexibility.
  • If you wish to choose early retirement, this will happen irrespectively of whether you remain at work or not.
  • You may also benefit from staggered or phased retirement.

QROPS (QUALIFYING RECOGNISED OVERSEAS PENSION SCHEME)

QROPS schemes allow individuals to transfer their UK accrued pensions in to another jurisdiction when they retire abroad.

An individual can qualify for a QROPS if they are between the ages of 18 and 77 and have retired, or are seriously considering retiring abroad to another country in the next 12 months. You must also have accrued a pension of over £50,000 and are planning to be overseas for 5 years or more.

If you are planning to move abroad, a QROPS scheme can offer you greater benefits than by leaving your pension in the UK, including:

  • The pension income is more tax efficient.
  • You can take a tax free lump sum of up to 30%.
  • There is a much greater investment freedom.
  • Take income and benefits in the currency of your choice.
  • All unused pension funds can be left to your beneficiaries.
  • No need to take an annuity or pay a UK tax charge upon death.
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