As the awareness about QROPS is spreading, more and more UK expats are rushing to independent financial advisors to know more about how it can be used in their particular investment situation to maximize their pension earnings.
UK pensioners are now more than willing to cash in on their UK pension fund via QROPS transfers to their preferred foreign destination. The conditions that they need to fulfil to qualify for qualifying recognized overseas pension schemes are not tough. They need to be a non UK resident for five or more tax years and their pension fund must be more than £10,000. They can qualify if they meet the above two conditions and also as long as they have not bought an annuity. Age, in this case does not matter.
Under HMRC QROPS rules, pensions may be transferred to a qualifying recognized overseas pension scheme. You must consult expert QROPS providers to know how the QROPS plan works in your chosen foreign destination. Some countries such as Guernsey, Isle of Man, Gibraltar and Malta do not have the facility to cash in on the pension plan. The rules regarding QROPS pensions are different for residents and expats.
New Zealand, Australia and many other countries offer residents the facility to cash in a pension fund and they are also recognized by HMRC. This is because they follow a separate set of rules. It is imperative that you satisfy the rule of staying for five years or more outside the UK.
Unfortunately, some unregulated advisory firms mislead clients by allowing transfers to take place even when this critical qualifying condition is not met. In such cases, HRMC can impose a tax of 55 percent on the gross transfer value. It can come as a horrible surprise to those who have been wrongly advised.
That is why you must take the advice of qualified and experienced independent financial advisors who are well aware of the various clauses and conditions of the new QROPS rules. There are some areas of the law that are complex and can be tough to decipher for the common person. Experts can help you maximize your pension fund in the most convenient way possible.
Source: ArticleTrader.com