If you have lived and worked in the UK and are now living in the United States, you could find handling your UK pensions challenging. Transferring your pension to a QROPS may be a good option to enable you to overcome those challenges.
In 2006, legislation was passed enabling UK expats to transfer “frozen” pension schemes to other countries.
Who Can Benefit From a QROPS?
As a US resident, it is possible to transfer your pension to an offshore jurisdiction with a double taxation agreement with the US. It is best to use a trusted Registered Investment Adviser based in the US who understands QROPS and how it is applicable for US residents.
This is especially important for Defined Benefit or Final Salary schemes. Rules have changed and it is now necessary to work with companies regulated in the US and UK. This provides a lot more protection for holders of these pensions and needs careful analysis. Alconbury Trust can help you with Defined Benefit and Final salary schemes.
Benefits of a QROPS
Benefits include:
Larger lump sums – A QROPS allows you to take a 30 percent initial lump sum at age 55 or older compared to 25 percent from a UK pension.
Death benefits – in the UK, as of 2015, a 45 percent tax is due on death benefits on death over the age of 75. This does not apply to a QROPS.
With Defined Benefits or Final Salary schemes, on death, the surviving spouse will normally only receive 50 percent of the pension. The pension will cease on the death of the surviving spouse. A QROPS allows members to leave 100 percent of the value of the remaining pension to anyone they wish.
Consolidation – Pensions can be consolidated into one pot, allowing for easier management and access.
Investment choice – have a say as to how and where your money is invested.
Private wealth management – Instead of being a policy number at a large institution, get personal attention in all aspects of financial planning when you need it most. As a foreigner in the US, deal with someone who understands your needs and the complexities of your situation.
If you would like to learn more about the benefits of a qualifying recognized overseas pension scheme come to Alconbury Trust. We specialize in providing UK expats with standard and unique retirement planning solutions You can find us online at Website URL for more info.
