Brexit could see the end of tax-free transfers to specialist QROPS offshore pensions for expats.
Campaigners are already collecting signatures on a petition to the UK Parliament calling for the end of the overseas transfer charge on QROPS.
And the fear is the charge could extend to pension transfers with European Union countries once Brexit has taken place.
It is thought the tax status of UK expats in Europe will remain the same during the transition period – which lasts from March 29, 2019 until December 31, 2020.
If so, British expats have a window of opportunity to move their UK pensions to a tax and investment efficient QROPS.
Petition protest
So far, almost 450 people have signed up to the online petition.
A lot more signatures are needed to spur the government into making a response. If the tally reaches 10,000, the government will reply – and 100,000 names are needed to trigger a debate in Parliament.
The transfer charge is a 25% levy on moving pensions from the UK to a QROPS or between QROPS unless they live in Europe or one of 13 countries which have QROPS outside Europe.
“This is most unfair to the thousands who cannot access a QROPS pension where they live,” said protestor William Wilson, who posted the petition.
“The overseas transfer charge discriminates against expats outside the European Economic Area in a country which does not host a QROPS, making them pay a 25% exit tax on moving their pension fund from the UK to a QROPS to gain better financial terms.
Unreasonable charge
“The charge is unreasonable as the rules punish QROPS members for financial planning when savers with other pensions, like Self-Invested Personal Pensions (SIPPs), can live in the same place as a QROPS saver and suffer no transfer charge on moving their fund.”
QROPS transfers could be further complicated by Brexit residency rules.
Pensions, tax and wills will have to be reviewed as expat residency might change if passports are surrendered in favour of applying for a new passport and residency in another European country.
Expats electing to retain their UK nationality and passport, may find they are in a tax dilemma, depending on where they live in Europe.
