There have of course been lots of chatter amongst commentators and within the global expat community about the proposed changes to the UK pensions regime.
Chancellor George Osborne gave his Autumn Statement recently which set out some more detail of the new rules. Here we will explain a little further about the latest situation and what some of the continued benefits are of non-residents moving their UK pensions to a QROPS.
Firstly there is the possibility of taking a 30% tax free Pension Commencement Lump Sum.
After transfer to a QROPS there will be no tax to pay on the fund upon death. This is the case whether death occurs before after you turn 75.
Depending on where you are living and what jurisdiction your QROPS is held in, you may be able to retire as early as 50 years of age.
Again, depending on your residency and QROPS jurisdiction it may be possible have your pension income paid gross.
Many UK pension holders who are living overseas appreciate the increase in investment flexibility that is available with a QROPS. This even includes the ability hold the pension in a variety of currencies.
Removing your assets from the UK may also help you establish domicile outside of the UK.
Despite there seeming to be many advantages in the new UK pensions regime it must be noted that there are still some serious drawbacks.
If, as most people do, die after the age of 75, unlike with a QROPS, there will be a massive 45% tax to pay on any lump sum pay-out. This is made more erroneous with the proposed removal of the personal allowance from non-residents.
Indeed, with many of the new positive flexibilities due to also be applied to QROPS there is more reason as ever to explore whether a QROPS could be right for you.
