Offshore QROPS Benefits
Posted: 13 January 2009
Since 6th April 2006, when the UK introduced QROPS, new retirement planning opportunities were presented to UK pension holders.
Prior to April 2006, UK pension members moving overseas had a straight choice of either leaving their pension funds in the UK or to transfer to their new country or territory. There could be serious disadvantages to this. For example, what if the pension member’s new country had schemes that had even less retirement flexibility than the UK (or even no pension schemes at all)?
The advantage of QROPS, since their inception, is that the member does not have to transfer his QROPS to the same country that they are migrating too. This means that the UK pension member can potentially have worldwide options. This is important for many people that otherwise feel forced to purchase an annuity in the UK.
With QROPS options, however, come planning issues. It is vitally important that a UK pension member makes the right choice of QROPS. Not only should an individual look at how the benefits are paid from the scheme, they also need to look at the tax position of that country or territory and the investment choices the scheme has to offer.
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