Monday, February 24, 2020

Offshore pension jargon explained

Must read

Spending Cash Is Becoming A Thing Of The Past

The days of handing over cash could be numbered as the economy is in a shift to digitisation, warn campaigners.

Business Angels In Call To Ditch EU Investment Handicaps

Fund managers are worried that a Brexit trade deal will see the government scrap or restrict tax breaks on hugely successful investment schemes that...

Global Giant Shuts Poor Performing Funds

Investors choosing to pull their cash from wealth manager Jupiter have triggered the closure of two under performing funds. The global investment giant has announced...

Super Tax Refunds On The Way For 2.6m Aussie Savers

Millions of Australian superannuation savers are set to pick up a surprise cash payment from the taxman. Around 2.6 million saving for retirement in a...

Pensions are confusing, but offshore pensions are even worse because they involve unfamiliar terms and rules that few retirement savers run into unless they are expats.

Here are some of the most common terms bandied about by expats and their financial advisers explained:

Qualifying Recognised Overseas Pension Scheme (QROPS) – A special pension for British expats and international workers who have spent time working in the UK which has seen them build up a pension fund.

QROPS are supervised by HM Revenue and Customs in the UK and were started in April 2006 to allow British pension savers easier access to their retirement cash if they retired to an EU country.

The pensions quickly caught on elsewhere and are now available in 30 countries.

Find out more about transferring your UK pension overseas

Recognised Overseas Pension Scheme (ROPS) The latest name for a QROPS. QROPS are ROPS, but confusingly not all ROPS are QROPS.

ROPS List A list of all ROPS self-certifying they meet HMRC’s qualifying rules for offshore pensions. The list is published twice a month – on the 1st and 15th of the month. Occasionally, additional lists are published.

The list is relevant because retirement savers can only transfer pension cash from a UK pension or another QROPS to a pension on the current list.

Download the latest HMRC ROPS List

Overseas Transfer Charge A tax levied on some pension-to-QROPS and QROPS-to-QROPS transfers. The charge was introduced in March 2017.

The general rule is if you live in the same country as your QROPS is based or live in a European Economic Area (EEA) country and have a QROPS in another EEA country, you do not pay the charge.

Other exemptions apply, for instance, transfers to pensions of non-governmental international agencies or money going to an employer pension.

The charge is calculated as 25% of the amount transferred.

Find out more about the Overseas Transfer Charge

Countries in the EEA and EU

QROPS centre A financial jurisdiction providing corporate and commercial services to residents and non-residents.

Australia is the place with the most QROPS pensions – around 44% of the 1,100 or so currently listed worldwide, followed by the Isle of Man. Together they account for around 60% of all QROPS.

- Advertisement -

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest article

Spending Cash Is Becoming A Thing Of The Past

The days of handing over cash could be numbered as the economy is in a shift to digitisation, warn campaigners.

Business Angels In Call To Ditch EU Investment Handicaps

Fund managers are worried that a Brexit trade deal will see the government scrap or restrict tax breaks on hugely successful investment schemes that...

Global Giant Shuts Poor Performing Funds

Investors choosing to pull their cash from wealth manager Jupiter have triggered the closure of two under performing funds. The global investment giant has announced...

Super Tax Refunds On The Way For 2.6m Aussie Savers

Millions of Australian superannuation savers are set to pick up a surprise cash payment from the taxman. Around 2.6 million saving for retirement in a...

Builders Scamming Online Find-A-Trader Sites

Unscrupulous builders are scamming online find-a-trader platforms by bribing customers to post fake reviews, a web site owner claims. Even though thousands of home owners...