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HMRC QROPS - HM Revenue Customs have released a detailed proposal for changes to the Qualifying Recognised Overseas Pension Scheme (QROPS) regime. The measure will affect QROPS and QROPS transfers actioned on or after 6th April 2012. All changes are subject to the consultation process. The objective of this measure is to ensure a fairer tax system and to ensure that the QROPS system continues to be used for its intended purpose. There have been reports that QROPS has been subject to misuse. Summary of the proposed revisions: 1. Secondary legislation will be introduced to revise the conditions that a scheme must meet to be a QROPS 2. Introduce an acknowledgement by the individual, to be completed before a transfer is made, and tax charges may apply 3. Introduce revised time limits for registered pension schemes to report transfers to QROPS 4. Provide additional powers for HMRC to request information from a scheme manager of a QROPS 5. Revise the time limits for the reporting of payments by a QROPS to HMRC Geraint Davies, Managing Director of Montfort International Ltd and QROPS.CO.UK (a leading QROPS adviser) said that, ‘Montfort International has already put together thoughts that will be submitted to HMRC as part of the consultation process’ HMRC’s detailed QROPS proposal can be viewed at: http://www.hmrc.gov.uk/tiin/tiin650.pdf (http://www.hmrc.gov.uk/tiin/tiin650.pdf) Montfort International Ltd / QROPS.CO.UK are considered leading QROPS advisors. If you are planning to move overseas, or are already a UK expatriate and would like advice on the options available, or how these proposed changes may affect you, please do not hesitate to contact our team on +44 (0)1483 202072. Wednesday, 07 December 2011 18:25

Potential Issue for Australian QROPS - Once you have reached pensionable age (which varies for those born pre-1964 but remains 60 for those born after 1964), you are allowed to withdraw your entire superannuation savings fund as a tax-free lump sum. With a growing population and with many going to Australia to retire, it seems that an increase in the number of people withdrawing funds rather than living on earnings created through employment is becoming an issue. This may cause a limit to the amount of superannuation that can be withdrawn. Hopefully it will not create a situation such as in the UK where an individual can only take a maximum 25% of their pension fund as a lump sum with the remaining amount being taken as regular payments. The importance of QROPS in other jurisdictions then becomes more important for those planning to retire younger and with greater flexibility as the Australian market looks to tighten its grip on its generous retirement facilities. Friday, 11 November 2011 16:07

Breaking Domicile – the Gaines-Cooper case - HMRC have won a landmark case. For those who thought that staying in the UK for no more than 91 days per year was sufficient to break domicile – think again. The ruling comes at a time when the HMRC have been making many revisions to what would constitute UK domicile and will surely have an impact on any policy that is subsequently brought out in the coming months. The fact that Robert Gaines-Cooper thought that he was a non-UK domicile as he spent no more then 91 days in any year within the UK, goes to show that more is taken into account than a simple formula on how long you can stay in the country. The ruling has taken into account that he had sufficient ties in the UK which the High Court ruled to be correct and means that Gaines-Cooper is due to pay taxes stretching back to 1976. This presents problems for those who thought that they had broken UK domicile as this will allow the HMRC to pursue thousands of British tax exiles who may have thought that their liability to the UK was no more. The new rules appear to tighten the UK’s grip on those wanting to break domicile with relative ease and make it more clear cut what will constitute a non-dom compared to a domiciled case. For example the new proposed rules state you are not resident in the UK for a tax year if: you were not resident in the UK in all of the previous three tax years and you are present in the UK for fewer than 45 days in the current tax year; or you were resident in the UK in one or more of the previous three tax years and you are present in the UK for fewer than 10 days in the current tax year; or you leave the UK to carry out full-time work abroad, provided you are present in the UK for fewer than 90 days in the tax year and no more than 20 days are spent working in the UK in the tax year. The Gaines-Cooper case shows that even meeting these new proposed rules does not necessarily mean that you are safe from the HMRC. This is an area, for all those who have left the UK and are in any doubt of their domicile status, to urgently review. Friday, 11 November 2011 16:02

Offshore QROPS Launch New Website - The long awaited opening of the new look QROPS.CO.UK website is finally here! A complete design overhaul has been introduced to bring us into the 21st century along with a newsletter sign up for professional advisers and all interested parties. QROPS.CO.UK will continue to offer excellent offshore pension advice to all those planning to migrate, those who already have and for those professionals in the industry who would like a helping hand in what can be a very complex sphere of the financial world. Contact us (index.php?option=com_qcontacts view=contact id=1 Itemid=4) today to see how we can help. Friday, 11 November 2011 15:33

Don't leave your planning till the last minute! - Many of you may plan to retire abroad for the warmer climates, Spain and Australia being amongst the favourite destinations for British ex-patriates. Many also get 'caught up in the whirlwind' that is migration and tend to forget that the very funds that will keep you living on a day-to-day basis in retirement are your pension funds. People tend to forget about their pensions in the UK and it's not rare for people to forget about pension funds that they have accumulated over the years that are in excess of £50k. A saving that cannot be ignored! Pensions that are forgotten about tend to be invested either in cash accounts that pay next to zero rates of interest and/or are invested in funds that have no bearing to the individual's risk profile. People's risk profiles will change over a lifetime as they tend to become more risk averse as they get older and wish for a steadier income. Early planning is therefore vital for a successful and rewarding retirement. Making sure a pension fund is managed well from the start is vital. This is something that may have been missed by many ex-pats already, but with the expertise of Montfort and QROPS.CO.UK, we can certainly help get a hold on your retirement planning with our knowledge of the QROPS and QNUPS markets. Friday, 11 November 2011 15:09

QROPS

Since 6^th April 2006 the UK’s Her Majesty’s Revenue and Customs (HMRC) has allowed individuals to transfer their UK pension funds to Qualifying Recognised Overseas Pensions Schemes (QROPS).

As a condition of being granted QROPS status, the Overseas Scheme will have agreed with HMRC to report any payments made from the scheme to the member, for the first five complete and consecutive UK tax years of the member’s overseas residency. This period is known as the ‘QROPS Reporting Period’.

During the Reporting Period, payments to the member must not exceed the allowable UK Government Actuary’s Department (GAD) limits and must not be made to the member before retirement age 55.

After the member has completed five consecutive years of non-residency, the reporting period falls away providing significant advantages.

QROPS could be of interest to any individual with UK pension funds, who is living or planning to live outside the UK, for the following reasons:

No requirement to purchase an annuity
Potential to access benefits 100% tax free
Increased flexibility in terms of how and when you access your benefits
Greater choice of investments
Pension funds held in the currency of your new home country, removing exchange rate risks
The ability to pass your pension fund to your beneficiaries upon death, free of Inheritance Tax
Tax benefits for those with funds approaching the lifetime allowance (£1.5 million in tax year 2012/13)

Whilst some QROPS require you to be resident in the jurisdiction to which you wish to transfer your benefits, others have no such restriction, allowing you to choose a tax friendly regime to suit your personal circumstances.

The strategy of using a QROPS in a third country can be useful for individuals in many circumstances. For example, the local regime of the migrant’s new country may have similar restrictions to the UK when it comes to accessing benefits. Another example may be that the migrant’s new country of residence has high levels of taxes or low levels of investment growth in their schemes.

With QROPS available in such a wide range of jurisdictions there is clearly a need for expert advice. To find out if QROPS are suitable for you, please contact us for further information where we can provide independent QROPS advice tailored to your personal circumstances.

On 15th February 2010 QNUPS (Qualifying Non UK Pension Schemes) were introduced. QNUPS can be of significant benefit to those who have already exceeded their QROPS period or who wish to return to the UK.

HMRC QROPS List (Please check the site for the most up to date version) - Click Here

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