What Are QROPS Exactly?
Posted by Simon Harvey on 18/09/09 14:26
Many people migrating and indeed, many advisers of clients migrating, could well be coming across the acronym QROPS for the first time. For those who are looking at a UK pension to overseas pension transfer, would probably be told that their pension should go to a QROPS.
With all the acronyms, abbreviations and letters that appear in Her Majesty’s Revenue and Customs (HMRC) legislation, it is unlikely that someone would have come across QROPS, unless they were researching an overseas pension transfer or knew someone that was researching an overseas pension transfer.
That said, what are QROPS? The initials stand for Qualifying Recognised Overseas Pensions Scheme, and, in short it is the only type of scheme (overseas) that you can transfer your UK pension to.
For migrating individuals that have built up a UK pension pot, which would have grown with the assistance of HMRC tax relief over the years, HMRC would want those funds to provide an income in retirement. As other jurisdictions in the world do not have the same rules for their pensions, HMRC made the decision that UK pension could only transfer to an overseas scheme that agreed to pay out benefits broadly on a par with UK schemes (within 5 years of the pension member’s overseas residency).
For an overseas pension scheme to become a QROPS, the administrators would have to register and be approved by the UK’s HMRC – and their responsibilities once their approval is granted are clearly defined in HMRC rules. For more answers to the question what are QROPS? Speak to overseas pension transfer specialists Global QROPS Ltd.