We are increasingly\u00a0being asked by\u00a0individuals\u00a0about the option to transfer their UK pension to a country to which they are either\u00a0emigrating to or more often returning to having worked in the UK for a number of years.<\/p>\n
Following are a few\u00a0answers to common questions on this\u00a0subject:<\/p>\n
W<\/strong>hat is a Qualifying Recognised Overseas Pension Scheme (\u2018QROPS\u2019)?<\/strong><\/p>\n A QROPS is an overseas pension arrangement that can receive a transfer of your benefits from a UK pension plan potentially without incurring tax charges. \u00a0HM Revenue & Customs (HMRC) in the UK requires a QROPS to broadly mirror a UK pension plan, meaning that if you do transfer your pension to a QROPS you can still receive a lump sum and income when you retire \u2013 subject to any local laws and tax treatment in the country where the QROPS is established, or where you are resident at that time.<\/p>\n Why would a QROPS apply to me?<\/strong><\/p>\n If you were permanently leaving the UK to live or work overseas and\u00a0you\u00a0wanted to transfer your UK pension to your new country of residence.<\/p>\n What if I\u00a0transferred my UK pension to an overseas pension that wasn’t a\u00a0QROPS?\u00a0 <\/strong><\/p>\n If\u00a0your pension benefit was\u00a0transferred\u00a0to an overseas pension arrangement that was not a QROPS, the transfer payment would be treated as an \u2018unauthorised payment\u2019 and subject to significant tax charges. The charge is currently 40% of the transfer or payment and in some circumstances, a surcharge of 15% may also be due.<\/p>\n A further charge may apply to the administrator of the UK pension plan if transfer rules are not met and the administrator could refuse to make the transfer as a result. \u00a0An administrator may also refuse to make the transfer if they have any doubt as to whether the transfer rules have been met, including whether or not the overseas arrangement is a QROPS.<\/p>\n