If you want to know how any people and how much cash have been transferred to Qualifying Recognised Overseas Pension Scheme (QROPS), the British tax man has at last published some revealing figures.
For the first time, HM Revenue and Customs (HMRC) has disclosed that nearly 110,000 retirement savers have switched £8.8 billion from UK pensions into QROPS.
The statistics run from April 6, 2006, when QROPS came on to the scene as part of Labour’s pension reforms, until April 2016.
The offshore pensions for expats have boomed in popularity – from 2,500 transfers in 2006-07 to a peak of 20,100 transfers in 2014-15, falling back to 13,700 in the last financial year.
QROPS pensions were introduced to aid British expats and international workers with UK pension rights easier access to their retirement cash after moving to another European State.
Tax changes on the way
They quickly became popular with expats and international workers in countries outside the EU.
According to the latest QROPS List published by HMRC, retirement savers have switched their UK pension funds to 1,228 QROPS in 40 different countries.
Retirement savers who do not live in a country offering a QROPS service can move their funds to ‘third party’ pensions in financial centres such as Gibraltar, the Isle of Man and Malta.
To transfer a fund worth more than £30,000 to a QROPS, savers must discuss their pension options with a financial adviser.
Chancellor Philip Hammond announced in his Autumn Statement 2016 that the tax treatment of foreign pensions, including QROPS, will change from April.
The details include dropping the 70% rule for QROPS outside the EU to allow providers to offer flexible access and taxing all benefits instead of 90% when a QROPS saver returns to live in the UK.
QROPS transfers between 2006 and 2016
| Tax year | No of QROPS transfers | Total value of transfers (millions) |
|---|---|---|
| 2006-07 | 2,500 | £120 |
| 2007-08 | 5,700 | £350 |
| 2008-09 | 6,100 | £360 |
| 2009-10 | 6,700 | £460 |
| 2010-11 | 12,800 | £1,360 |
| 2011-12 | 16,400 | £1,040 |
| 2012-13 | 13,400 | £1,000 |
| 2013-14 | 11,300 | £860 |
| 2014-15 | 20,100 | £1,760 |
| 2015-16 | 13,700 | £1,500 |
| Totals: | 108,700 | £8,810 |
Source: HMRC
Note: The number of transfers may include individuals who made more than one transfer to a QROPS
QROPS Information and Guidance
For more information about QROPS and the benefits it provides, download the iExpats QROPS Guide or complete the Get Advice form.
