Qualifying Recognised Overseas Pension Schemes (QROPS) are overseas pensions schemes, which are permitted for use by British expats by HM Revenue and Customs (HMRC). They enable people to transfer their pensions outside of the UK, in order to make use of better tax rates available to overseas residents, and minimize the risk of making regular transfers from the UK to the country in which you have retired.
There are many factors to consider when choosing the right jurisdiction for your pension transfer, as all jurisdictions differ. There are many factors to be taken into account, including politics, economics, protection, dispute handling and the client’s individual requirements and situation. Deciding where to invest your pension is a highly personal choice, and one that requires a great deal of planning and consideration.
The Isle of Man is a popular choice for UK expats when choosing an appropriate scheme, as it is considered to be one of the most reliable and transparent countries in terms of pension transfers. It is one of the most established jurisdictions for personal pensions, and is governed by the Isle of Man Income Tax Act of 1989, providing clients with legal security as well as full compliance with all of HMRC’s stringent rules and regulations. As the Isle of Man is close to the UK in terms of geography, politics and economics, it’s a safe and secure choice for UK expats who are looking for more freedom and flexibility in their pension scheme.
The Isle of Man offers many additional benefits to UK expats in terms of their pension transfers. For example, the flexibility offered in terms of investment direction. Funds can be self-directed, or delegated to an advisor or investment manager. This is a major advantage, as many other jurisdictions prohibit the self-direction of investments.
Other benefits include the ability to invest directly into residential property, a 30% payout as a tax-free lump sum upon retirement, and significant tax savings when compared to the UK’s SIPP schemes. Pensions are paid in line with Isle of Man tax rates, which currently stand at 18%. Additionally, in the event of death, only 7.5% is payable in tax. The remainder of the pension fund will be transferred to your nominated beneficiaries.
When selecting a pension scheme in the Isle of Man, it is important to ensure that the scheme is authorised by the relevant bodies. This will ensure that the scheme is secure, and appropriately regulated by the Insurance and Pensions Authority (IPA). The Isle of Man’s pension framework provides countless benefits for UK expats who wish to transfer their pension to a scheme with increased flexibility and tax efficiency. Prestige Wealth Solutions (PWS), with offices in Dubai, Qatar, Monaco, Cape Town and Johannesburg, can assist with decisions regarding the best Isle of Man Qualifying Recognized Overseas Pension Schemes (QROPS). Speaking to one of our advisers will ensure that your pension transfer goes smoothly, providing maximum return on investment and ensuring a secure and happy retirement.