If you are looking or already live outside of the UK and intend to remain outside of the country for over 10 years then transferring your pension into a QROPS could pay massive dividends.
Benefits of transferring your pension include;
- 0% Inheritance Tax If you keep your pension in the UK you are likely to pay between 35 82% tax on death. Hold it in a QROPS and you could pay as little as 0%.
- 0% Income Tax If you transfer your pension into a QROPS you could be able to pay no income tax. However if you hold your QROPS in Australia you’re liable to pay around 15% tax on the pension benefits.
- Increased Tax Free Lump Sum If you live in the UK you are only able to take out a lump sum of 25% whereas under new QROPS legislation you will be able to take up to 30%.
- Greater investment freedom with a QROPS scheme you are able to invest in a much wider range of investment products than if your pension remains in the UK.
- Lower management charges In comparison to UK pension funds, the management and running costs of a QROPS is lower
Payout of Benefits
- No Currency risk – you are able to take the income and the benefits in whatever currency you desire, therefore you are not at risk to currency fluctuations.
- Confidentiality A QROPS can provide you with greater secrecy and protection against possible legal action from creditors and claimants.
For more information on the benefits and also the drawbacks of transferring your pension into a QROPS either in Australia or into a third party jurisdiction please contact one of our qualified advisers here.