QROPS Questions

QROPS Retirement Planning

Some General QROPS Questions

  1. Why are UK pensions tied up in many layers of regulations & restrictions?

    • This is mainly to protect tax revenues of the UK government by taxing annuities.
    • Secondly, it is to stop pensioners from spending all their money in the first 5-10 years and then relying on the state.
  2. How long does it take to setup a QROPS Pension Transfer?

    • The length of the process varies. It can be 6 weeks or it can be quite lengthy and take a few months. On average, you should expect the process to take 2-3 months. Please see the procedure section to see the various steps.
  3. Is my plan subject to EU savings tax directive (for European citizens)?

    • A QROPS Pension Transfer plan is currently not subject to the EU Savings Tax Directive
  4. Do I have to first liquidate my assets held within my UK registered pension scheme before transferring them into a QROPS?

    • If the pension scheme is a SIPP or a SSAS, it may be possible to transfer the existing assets to the QROPS. Though this depends on the specific QROPS scheme.
    • For most other pension schemes you will need to liquidate your assets before transferring to a QROPS.
  5. Does the HMRC in the UK require the QROPS pension fund to report payments?

    • The HMRC requires that all QROPS providers notify them of any payments from transferred pensions for the relevant member. This does not apply unless:
      • The member is resident in the UK when payment is made.
      • Has not been resident in the UK for that year or any of the preceding five tax years.
  6. Will a QROPS Pension Transfer accept the transfer of a protected rights fund?

    • Yes, provided that the QROPS plan is willing to accept it.
    • Form CA 1881 needs to be completed as this enables HMRC to keep track of where the protected rights are. If you are transferring your protected rights it is necessary to state that you understand that all protection associated with UK pensions legislation is being given up.
  7. What happens if I have a QROPS Pension Transfer and return to the UK within 5 tax years?

    • If you are returning for holiday and are still a non-tax resident then everything is as per usual with QROPS.
    • If however, you are returning to the UK to work within 5 tax years, then you will need to report your QROPS to the HMRC and, although it can remain offshore, it will fall under UK rules and regulations.
  8. Will the QROPS declare any payments made from the scheme to the HMRC?

    • During the first 5 tax years, the QROPS trustee is required to let the HMRC know of any payments, withdrawals, or transfers made from the QROPS Pension Transfer.
    • After the first 5 years, the QROPS trustee is no longer required to let the HMRC know of any payments, withdrawals, or transfers made from the QROPS Pension Transfer.
  9. During the first 5 tax years of a QROPS Pension Transfer scheme do I also need to declare payments?

    • Yes
    • During the first 5 tax years, the QROPS trustee will report any payments or transfers made to HMRC. You must also fill out a self-assessment return (available from HMRC) and declare any payments or transfers.
    • If you have setup a QROPS Pension Transfer you should return your completed form to the tax office that is currently dealing with your affairs, or that which was dealing with your affairs immediately before you left the UK.
  10. Can I transfer from a QROPS to a Non-QROPS Pension Scheme?

    • No.
    • During the first 5 tax years of a member becoming a non-UK tax resident, payments need to be in accordance with HMRC approved guidelines. After the five years, payments need to be within the regulations of the jurisdiction.
    • HMRC favourable jurisdictions such as Guernsey will not permit transfers to a Non-QROPS pension scheme even after 5 years. Other jurisdictions that DO allow payments to Non-QROPS schemes run the risk of their HMRC approved QROPS status being revoked.
    • This is why Guernsey is one of the best QROPS jurisdictions as it is extremely unlikely that the HMRC will remove their approval.