Simon Parfitt explains QROPS in Benchmark Magazine
QROPS Explained – Simon Parfitt, Chief Executive Officer of Guardian Life Management, Hong Kong, has contributed to an article in Benchmark Magazine about overseas pensions.
Speaking specifically about Qualifying Recognised Overseas Pension Schemes (QROPS), Simon was giving his advice as part of an article offering tips about pensions for expats.
“It is possible to start a QROPS prior to leaving the UK,” said Simon, adding that there are other benefits.
Simon told the magazine a QROPS is a way to consolidate all of your pension pots and proactively manage your funds without being subject to the lifetime allowance cap, the maximum size your pension can reach before you could incur significant taxable charges.
He also pointed out that the scheme could reduce your inheritance tax liability to as little as zero.
Simon also explained that, depending on your location, you could benefit from Parfitt also highlights the potential to receive tax efficient income during your retirement years.
He said, “This largely depends on the double tax treaties that a QROPS jurisdiction that you are a resident in at the time of retirement. Hong Kong, for example, has no income tax on foreign earned pension income and Malta has a unilateral tax agreement with Hong Kong.
“Therefore, it is possible that you will not be taxed at source at Malta if your QROPS is there, but nor will you be taxed in Hong Kong, if you are a resident here.”
Nonetheless, even if you decide to repatriate to the UK, he said a QROPS is taxed at only 90% of normal income tax levels as it is classed as “foreign pension income”.
Before jumping on the QROPS bandwagon, Simon advised that you get a professional review of the types of schemes that you are transferring out of to determine whether there are any benefits you are losing and to ensure you choose the best jurisdiction for your circumstances.