Expat pension protesters have launched a petition aimed at persuading the government to scrap a massive tax on shifting their retirement savings offshore.
Since March 2017, expats have paid an overseas transfer charge on moving their pensions from the UK to an offshore Qualifying Recognised Offshore Pension Scheme (QROPS) or between QROPS schemes.
Only expats living in Europe or one of 13 other countries around the world hosting QROPS escape paying the charge.
The overseas transfer charge comes to 25% of the value of any pension fund.
According to HMRC figures, the average QROPS transfer since April 2006 has been £93,087 – which attracts an average overseas transfer charge of £23,272.
Unfair tax
“This is unfair to the thousands of British expats who simply want to make the most of their retirement savings,” said William Wilson, who posted the petition on the UK Parliament web site.
“The overseas transfer charge discriminates against expats outside the EEA 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.
“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.”
The pension needs to attract 10,000 signatures to gain a response from the government or 100,000 signatures to trigger a debate in Parliament.
Unreasonable rules for expats
“We hope to generate a lot of support from expats who face handing over a huge amount of their retirement savings for what seems no good reason,” said Wilson.
“The problem is expats are scattered worldwide and someone needed to pull them together, so the government is aware of their feelings.”
QROPS are specialist offshore pensions for UK expats and international workers who have UK pension savings.
HMRC says £9.83 billion has been moved from UK pensions to QROPS by 105,000 retirement savers since the scheme started in April 2006.
Click here to go to the petition page on the Parliament web site.
The petition is open until July 19, 2018.
“QROPS are not a financial product, they are a facility made available by HMRC so they don’t suit everyone. When considering transferring your pension ensure you explore all options and get proper holistic financial advice to ensure that the advice is fit and proper.
Although it’s great that something is finally happening to try and address the unfair charge