QROPS are overseas pension schemes that are beneficial for UK citizens who are planning on spending their retirement abroad. QROPS stands for Qualifying Retirement Overseas Pension Scheme, and to qualify, the offshore money saving pension schemes must be in accordance with the strict rules of the UK taxman. QROPS where initiated in 2006, in order to make pension schemes simpler due to the rising number of British workers who spend their retirement abroad. QROPs USA schemes are particularly in demand at present, as many people see the US as a perfect country for retiring due to the possibility of warm weather and the lack of language barrier.
Anyone who is planning on spending their retirement overseas can start a QROPS. This includes people who have already moved outside the UK, or people who are working in the UK from other countries who plan later to return to their homeland.
It is possible to transfer a UK pension to a Qualifying Retirement Overseas Pension Scheme. This allows you to have the benefits of flexible investment options covering a wide scope of foreign currencies, commodities and investment markers that are not usually available to pension investors in the UK.
Any country outside the UK can serve a QROPS, providing this scheme is in accordance to the laws laid down by Her Majesty’s Revenue and Customs. A QROPS can be set up in a country even while you are residing in another one – this gives you the benefit that you will pay lower taxes.
QROPS were devised to make planning for a pension easier for those who intend to retire in another country. Although the name sounds rather complicated, Qualifying Recognised Overseas Pension Schemes are worth considering if you are planning on spending your retirement years abroad in a warmer country.
A QROPS is a pension scheme that is allowed to receive funds from an existing UK pension. The main benefit of such a scheme is that you won’t pay tax, or you will pay a lot less tax on your money. Another major benefit is that in the event that you should die and other beneficiaries survive who can claim your pension, such as your spouse or children, they will not have to pay any inheritance tax. When you move to a new country, it will have its own rules regarding how your pension should be taxed. For example, QROPS USA will trigger a tax penalty by the IRS.
Some QROPS rules state that you need to actually live in the country where the pension scheme is held, whereas other schemes do not hold this for a requirement. You will need to do some research or consult with a professional adviser to find out which QROPS would be the best scheme for your individual circumstances.