QROPS can expand the financial options for expats and allow them to save for retirement in one tax-effective package.
But few expats understand the intricacies of QROPS and how they could help them plan for funding their golden years.
This guide is aims to answer some frequently asked questions about QROPS:
What does QROPS stand for?
The initials QROPS are an acronym for Qualifying Recognised Overseas Pension Scheme – now shortened by HM Revenue & Customs to ROPS.
The confusing bit is all QROPS are ROPS but not all ROPS are QROPS.
To check if a pension is recognised by HMRC, check out the ROPS List, which is published online every two weeks or so, generally on the first and 15thof the month.
It’s OK to transfer money to a QROPS on the list, but moving money to an unlisted pension is likely to trigger a fine.
Does HMRC approve QROPS?
This is another confusing point. Although QROPS must register with HMRC and HMRC publishes a list of qualifying scheme, they are not approved by the tax authority.
HMRC says the list is for pensions that have told them that the scheme meets the rules of a QROPS but no inquiries are carried out to confirm the notification.
How many QROPS are there?
The last QROPS List had 1,515 entries across 28 countries.
Can expats transfer their UK pensions to a QROPS?
Yes. That is what they are designed for, although some strict rules govern where an expat must live to benefit from a QROPS.
Retirement savers can also transfer funds between QROPS, subject to HMRC rules.
Will QROPS accept workplace pension transfers?
Yes. Expats can transfer a workplace pension to a QROPS and in many cases, opt for early access under many of the same pension rules as in the UK, such as drawing money from the age of 55 years old.
Can I have a QROPS in the UK?
QROPS are for expats who permanently live abroad in the European Economic Area or several other countries. Up-to-date details of where QROPS are currently available is included in the HMRC list, although the pensions could be based elsewhere if they meet the qualifying rules.
Read more and find out what is QROPS here