British expats now residing in the USA –and there is a lot of them –who still have pensions back in the UK have now seen the benefits of QROPS escalate.
Transferring a UK pension into a Qualifying Recognised Overseas Pension Scheme is nothing new for US residents, it has been a tax-efficient method of accessing one’s pension from their retirement destination in America for nearly three years now.
Flexibility Allowed
But with the primary QROPS destination for US residents, Malta, now able to also provide the newly introduced 100% access rule brought in back in England for those retiring there, the appeal and benefits continue to supersede those of any other comparable jurisdiction. US-based savers can now tax-efficiently withdraw their entire pension pot in one go if they wish, and it is flexibility like that, particularly while living under the stewardship of the IRS, which is of such great appeal.
The Malta Financial Services Authority worked extremely hard to bring in US tax attorneys and UK pension experts, in order to create an overseas pension model capable of working with the US tax regime and the FATCA reporting requirements.
The jurisdiction has a double taxation agreement in place with the US that differs from that of the UK, and most other countries. It states that pensions drawn from the EU member state are not treated as taxable events on their way in to America. This make Malta the prime jurisdiction for pension transfers among expats, and as such many top pension providers now operate from the Mediterranean island.
Running the Gauntlet
British pension holders who leave their schemes back in the UK while living overseas are effectively running a gauntlet right now. The Conservative’s much lauded pension reforms of April 2015 have been widely discredited, and regardless of who wins today’s General election, industry experts expect an emergency Budget perhaps as soon as two weeks after the dust settles at the polls.
It is the constant uncertainty of what is likely to happen in the UK pension market that encourages such a lot of expats to take their money with them when they leave, but aside from security and the ability to make a clear plan for the future, the benefits stretch further.
QROPS Benefits:
- Multiple Pension Consolidation – Combining pension pots yields greater performance
- Wider investment options – A range of markets and assets classes are available
- Tax-efficiency – The UK has one of the toughest tax regimes in the world
- Currency choice – Avoiding the instability represented by currency fluctuations
If you are a US resident with a British pension, or more information about QROPS in Malta, contact us to be connected with an expert today.
