QROPS Pension Transfers for Residents of India
QROPS were introduced several years ago by the government to promote pension transfers to overseas pension schemes. They have become extremely popular for residents of India who wish to have more flexibility over their UK pension arrangements, and especially so for doctors who have returned to India and want to transfer their UK NHS pension into a more flexible QROPS scheme.
In essence, a QROPs is any pension plan which is recognised as fulfilling certain criteria as laid down by the HMRC.
The QROPS pension structure then allows anyone who either lives abroad, or intends shortly to live permanently outside of the UK, whether for work, or to retire, to transfer their UK pensions into an offshore pension plan, and to avail themselves of several key advantages.
To qualify as a QROPS, various requirements must be met. For example, the HMRC will look at the country where the scheme is based, the investment flexibility and rules associated with the fund assets, the drawdown criteria, and other benefits associated with the scheme. Broadly speaking, as a rule of thumb, the rules of the QROPS scheme, whether based in India or elsewhere, should be similar to the UK rules, in relation to retirement age and tax free lump sum drawdown. If the rules of the QROPS scheme flout these rules, as LIC's jeevan Akshay VI QROPS scheme did, then the QROPS will be banned by HMRC, and removed from the official list of approved QROPS schemes.
In essence, a QROPs is any pension plan which is recognised as fulfilling certain criteria as laid down by the HMRC.
The QROPS pension structure then allows anyone who either lives abroad, or intends shortly to live permanently outside of the UK, whether for work, or to retire, to transfer their UK pensions into an offshore pension plan, and to avail themselves of several key advantages.
To qualify as a QROPS, various requirements must be met. For example, the HMRC will look at the country where the scheme is based, the investment flexibility and rules associated with the fund assets, the drawdown criteria, and other benefits associated with the scheme. Broadly speaking, as a rule of thumb, the rules of the QROPS scheme, whether based in India or elsewhere, should be similar to the UK rules, in relation to retirement age and tax free lump sum drawdown. If the rules of the QROPS scheme flout these rules, as LIC's jeevan Akshay VI QROPS scheme did, then the QROPS will be banned by HMRC, and removed from the official list of approved QROPS schemes.
What are the benefits of a QROPS Pension in India?
QROPS have been around now since 2006, and since that time thousands of returning Indians have unlocked their frozen UK pensions, to take advantage of the many benefits available by transferring their pension to a QROPS. In this article we will explore some of the advantages of QROPS from the perspective of a UK expat who has their pension assets tied up in a UK pension scheme.
There are numerous advantages of a QROPS:
1. A key advantage of a QROPS is that upon death, any unused pension assets can be left to your beneficiaries – as opposed to an annuity, which dies when you do. This is a significant benefit, especially when the pension assets are significant, and also when the pension holder dies soon after the annuity has been purchased.
2. The investment choices in a QROPS pension are considerably wider. With a traditional UK pension, the pension trustee will be required to invest in a very narrow range of products, such as UK equities, bonds and a select few others. With a QROPS, there is a much wider range of products to choose from, such as capital protected instruments, commodities, hedge funds. The investment adviser is much better able to move in response to the markets by transferring out off poorly performing asset classes, and investing in higher performing funds and products.
3. There is also the ability to take an income in the currency of your choice. Thus if you are living in Europe, you can drawdown an income in Euros, and not be subject to the currency risks involved in drawing an income in Sterling, and converting it back into Euros to cover your day to day expenses.
4. Tax free lump sum. It is possible to take a lump sum of up to 30% of the fund’s value (depending on the jurisdiction).
5. There is much greater confidentiality with a QROPS. Many QROPS schemes are based in offshore jurisdictions, and offer a much higher level of confidentiality than you see in the UK, thus you can keep your affairs private, away from the prying eyes of the UK taxman.
Thus it can be seen that the potential benefits of transferring your UK pension into a QROPs can be significant. However professional advice on a QROPS transfer must be sought, and extensive research conducted into the best QROPS provider for your particular circumstances. For more information about QROPS, or to speak to a qualified adviser from some QROPS advice, go to www.qropsadviser.in, theleading source of QROPS information on the internet.
QROPS Advisers are the global leaders in guiding expats on setting up QROPS. It is vital to understand that QROPS are not an appropriate solution for all expats. Seeking specialist QROPS advice is most important when considering whether such a proposal is suitable for you, and you can find a plethora of resources at their website especially devoted to QROPS at QROPS Adviser Group.
There are numerous advantages of a QROPS:
1. A key advantage of a QROPS is that upon death, any unused pension assets can be left to your beneficiaries – as opposed to an annuity, which dies when you do. This is a significant benefit, especially when the pension assets are significant, and also when the pension holder dies soon after the annuity has been purchased.
2. The investment choices in a QROPS pension are considerably wider. With a traditional UK pension, the pension trustee will be required to invest in a very narrow range of products, such as UK equities, bonds and a select few others. With a QROPS, there is a much wider range of products to choose from, such as capital protected instruments, commodities, hedge funds. The investment adviser is much better able to move in response to the markets by transferring out off poorly performing asset classes, and investing in higher performing funds and products.
3. There is also the ability to take an income in the currency of your choice. Thus if you are living in Europe, you can drawdown an income in Euros, and not be subject to the currency risks involved in drawing an income in Sterling, and converting it back into Euros to cover your day to day expenses.
4. Tax free lump sum. It is possible to take a lump sum of up to 30% of the fund’s value (depending on the jurisdiction).
5. There is much greater confidentiality with a QROPS. Many QROPS schemes are based in offshore jurisdictions, and offer a much higher level of confidentiality than you see in the UK, thus you can keep your affairs private, away from the prying eyes of the UK taxman.
Thus it can be seen that the potential benefits of transferring your UK pension into a QROPs can be significant. However professional advice on a QROPS transfer must be sought, and extensive research conducted into the best QROPS provider for your particular circumstances. For more information about QROPS, or to speak to a qualified adviser from some QROPS advice, go to www.qropsadviser.in, theleading source of QROPS information on the internet.
QROPS Advisers are the global leaders in guiding expats on setting up QROPS. It is vital to understand that QROPS are not an appropriate solution for all expats. Seeking specialist QROPS advice is most important when considering whether such a proposal is suitable for you, and you can find a plethora of resources at their website especially devoted to QROPS at QROPS Adviser Group.
NHS Pension Transfers for Indian Residents
Every year, thousands of doctors and nurses return to India after working in the UK. The vast majority of thee returnees worked for the NHS, and therefore will have accumulated very valuable pension rights in the NHS pension scheme. Unfortunately, when you return to India, your NHS pension is effectively 'frozen', and you are unable to access it until you are 60 or even 65, dependiing on which part of the NHS pension scheme you are a member of.
Most Indian residents want the flexibility and control to take both tax free lump sum, and an income, much earlier from their NHS pension, and therefore choose to transfer their NHS pension into a QROPS scheme. Indian residents can benefit from an NHS pension transfer in numerous ways, including the following:
Most Indian residents want the flexibility and control to take both tax free lump sum, and an income, much earlier from their NHS pension, and therefore choose to transfer their NHS pension into a QROPS scheme. Indian residents can benefit from an NHS pension transfer in numerous ways, including the following:
- Early access to your NHS pension. As noted above, the NHS pension only starts paying out benefits from the age of 60.
- Receive your pension free of UK income tax.
- Avoid purchasing an annuity.
- Pass on your remaining pension fund to your loved ones. With your NHS pension, when you die, your spouse (if he or she is still alive) will only receive half of your pension income. And when he or she dies, there are no further payments. However, by transferring your NHS pension into a QROPS scheme in India, your beneficiaries will benefit from the full amount of the pension fund.
- Avoid the risk of reduced NHS pension payments. There have been growing concerns in the press and amongst pension experts that the NHS pension scheme will need to undergo further reforms in the future, as existing scheme members live longer, and the funding burden on the NHS pension scheme increases. This may result in reduced pension payments for scheme members. If an Indian residents transfers their NHS pension to a QROPS plan, they can avoid this potential worry, and take full control over their pension.
Want more information about QROPS Schemes for Indian residents?
For more information about QROPS schemes in India, or to talk to a qualified QROPS adviser, please contact QROPS Adviser Group at [email protected] or call us on +44 7582 589561. Alternatively visit our website at www.qropsadviser.in for more information.