Wealth management firm Sovereign has announced the launch of a new Qualifying Recognised Overseas Pension Scheme (QROPS) based in Malta.
The firm is also offering a ‘QROPS lite’ version of its recently unveiled Gibraltar-based Calpe Retirement Benefit Scheme.
Sovereign has run pensions in Malta since 1999 with licences from the Malta Financial Services Authority (MFSA) for both fiduciary services and running retirement schemes.
The new QROPS – the Centaurus Retirement Benefit Scheme – has been listed by HM Revenue and Customs (HMRC).
Prospective retirement savers will be charged £806 to set up the QROPS and will then pay an annual ‘Trustee Fee’ of £1,048.
Lower fees for Gibraltar QROPS lite
Meanwhile, the Calpe Lite Retirement Benefit Scheme, a Gibraltar-registered QROPS, is aimed at retirement savers with pension funds adding up to £100,000 or less.
Offering low fees to make setting up a QROPS cost-effective for pension savers with smaller pots, the set up charge is £300 with ongoing annual fees of £500.
This scheme has also been listed by HMRC as a QROPS and follows the launch of the main Calpe Retirement Benefit Scheme in Gibraltar in November 2012.
Sovereign offers a range of retirement schemes and has offices around the world to help clients and IFAs with advice and technical support.
QROPS are offer tax effective financial solutions and flexible investment options to British expats who have moved permanently abroad and international workers who have accrued UK pension rights.
QROPS tax and investment advantages
With a QROPS, an expat could move their pension abroad and pay income tax where they are resident rather than at UK rates, though the scheme must be recognised by HMRC to qualify for the benefits.
To gain the maximum benefits from a QROPS arrangement, an expat should be a non-UK resident for at least five full consecutive years.
Also, under Malta’s and Gibraltar’s QROPS rules, up to 30% of the fund can be taken tax free though the retiree may be subject to tax in their own country. Gibraltar imposes a withholding tax of 2.5% on all retirement income paid.
Like most pensions schemes, there are other issues involved with using QROPS for a pension and specialist advice should be taken before joining a scheme.
Retirement savers can choose from around 2,500 QROPS schemes in nearly 50 countries around the world – and a QROPS can be based in one country even if the investor lives in another country.
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