QROPS is the abbreviation for Qualifying Recognized Overseas Pension Scheme which enables British nationals to receive their pension in any country which is in Double Taxation Agreement (DTA) with the UK. A Recognized Overseas Pension Scheme is only acceptable if it meets Her Majesty’s Revenue and Customs (HMRC) criteria.
The amendment that allowed pension transfer abroad was put forwarded by HMRC in 2006 following EU human rights legislation pertaining to freedom of capital movement. It is extremely important to gain professional advice before getting QROPS as it can be both destructive and advantageous. It is especially important for those who are new to this term. So here I will tell you some of the major advantages and disadvantages of QROPS.
- There is no restriction on the amount of funds added or accumulated in QROPS.
- If managed correctly, QROPS funds can be used without UK taxes.
- It is free of UK inheritance tax as well as UK death tax in case of nominating a beneficiary.
- Offers greater flexibility and control over pension funds.
- Choose the currency more convenient to you and receive your pension funds in that currency.
- Reduce fees and avoid tax by merging different funds into one structure.
- The cost or fee of getting the scheme can be high.
- Taxes may be applied on withdrawals depending on the country the pensioner is residing in.
- In case of any ambiguity, QROPS can lose its HMRC recognition.
- Finding trustworthy advisers can be difficult.
So these were some of the major pros and cons of the scheme. It is therefore extremely important to have reputed experts by your side before making any decision. But before moving any further, you should also know that there is another scheme known as Qualifying Non-UK Pension Scheme (QNUPS). Make sure that your advisers guide you properly about both these schemes.
There are a large number of British expats living in Dubai and many of them are unable to find a way or don’t know how to receive their pensions in Dubai. If you have permanently moved to Dubai, surely you would not like to waste all your pension funds. So Finsbury brings QROPS Dubai to solve all your problems and worries. Finsbury is a certified association of financial experts and professionals. They provide opinion, advice, and consultation on various finance related issues such as succession plan, insurance plan, education plan, retirement plan and of course QROPS Dubai.
As stated earlier, QROPS is a crucial decision that can result in a huge loss if not managed properly. Moreover, you need to prove your candidacy to HMRC before qualifying for QROPS. If you are a Dubai resident, you are lucky to have Finsbury team at hand that can give you honest opinion considering all the legal, local and international scenarios so you won’t have to worry about heavy taxes and mismanagement. You can check out QROPS Dubai official website to learn more about the group. There also guides available for help. Time to make the right move!