Indian residents UK pension transfer to QROPS

If you are an Indian national and have acquired a UK pension, there are significant, tax-efficient benefits of transferring your pension pot into a QROPS when you leave the UK.

QROPS – or Qualifying Recognised Overseas Pension Schemes – are schemes recognised by HM Revenue and Customs to accept any number of UK pensions.

Whether you have worked as a doctor, nurse, lecturer or in any other profession, a QROPS allows you to settle wherever you want in the world – including India – and enjoy superior tax and investment benefits from your pension.

Benefits of transferring your UK pension into QROPS

The circumstances vary depending on what type of residency you hold in India, yet the potential benefits are vast, as outlined below:

• Since the 1st of April 2011, growth of an NHS pension has linked to the Consumer Prices Index, which follows a very low rate of inflation. A QROPS however allows for a much greater investment choice, including corporate bonds, high dividend funds, gold and even cash – often meaning much higher returns.
• 100% of your pension pot passed to your loved ones upon death, unlike pensions in the UK which can face the UK’s ‘death taxes’ of up to 55%.
• No UK income tax – meaning you avoid UK taxes on your income which can be as high as 50%.
• Receive your income in any major currency: So you can choose to have your income paid in rupees, dollars etc. This is a significant benefit over a UK pension which can only pay out in British pounds; which would mean you face complicating timing issues trying to get the best currency conversion rate for your income.
• With a QROPS, you can consolidate any number of UK pension funds into one larger, easier to manage plan. This does not only make your retirement income easier to manage; it also means all of your funds benefit from improved investment choice, so you witness bigger growth.

Which jurisdiction works best?

For people moving back to India there are two key jurisdictions to consider: Malta and Gibraltar.

The choice between these options depends on the size of your pension pot. A Malta QROPS will see an individual pay one higher rate of tax, whilst a Gibraltar QROPS requires two smaller taxes.

Yet there are also special QROPS in India which are based in rupees – although the benefits may not be as pronounced as in other schemes.