Are QROPS a good idea?
Let’s start by looking at the QROPS list. Not all schemes choose to be on this public listing, so you will need to check with the pension scheme directly if it’s not on the list. HMRC QROPS updates the list twice a month
Information about the HMRC QROPS list is provided by the Pensions Advisory Service
There is a lot of web space taken up by the term QROPS but we are often asked; are QROPS a good idea?
To answer the question of whether QROPS are a good idea you first have to understand their regulatory position.
HMRC QROPS Approved , Registered or Recognised?
There appears to be considerable confusion among non-UK advisers and expats as to whether a QROPS on the HMRC list is approved, registered or recognised.
This systém of exempt approval came to an end on A Day in 2006 as a result of Pension Simplification. There is no longer any HMRC approval of any pension- UK or QROPS. To suggest otherwise is misleading in the extreme.
UK pensions are registered, not approved, by HMRC and schemes that are registered receive confirmation from HMRC.
Let’s take the wording direct from HMRC’s website-
The list contains pension schemes that have told HMRC that they meet the conditions to be a ROPS and have asked to be included on the list.
An updated list of ROPS notifications is published on the first and 15th day of each month. If this date falls on a weekend or UK public holiday the list will be published on the next working day.
Sometimes the list is updated at short notice to temporarily remove schemes while reviews are carried out, for example, where fraudulent activity is suspected.
HMRC can’t guarantee these are ROPS or that any transfers to them will be free of UK tax. It’s your responsibility to find out if you have to pay tax on any transfer of pension savings.
HMRC will usually pursue any UK tax charges (and interest for late payment) arising from transfers to overseas entities that don’t meet the ROPS requirements even when they appear on this list. This includes where taxpayers are overseas. HMRC will also charge penalties in appropriate cases.
Tax relief is given on pensions to encourage saving to provide benefits in later life. Accessing benefits (directly or indirectly) before age 55 will result in a liability to UK tax charges in all but the most exceptional circumstances. You should seek suitable professional advice including from a regulated financial adviser.
This could not be clearer
HMRC QROPS list- Regulated Financial Adviser
Are QROPS a good idea?. Well, the last HMRC point is always going to be important, as the HMRC QROPS list is not approved and advice needs regulation!
We covered this in detail, using one of the more popular jurisdictions on the HMRC QROPS list HMRC QROPS list
Are QROPS a good idea? Let’s take a look at the Facts and Myths
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
This article was published on 13th February 2017
- HMRC QROPS list- Suspended
- Recognised overseas pension schemes
- 10 Reasons to use a QROPS. Facts and Myths, QROPS Increased Flexibility (7)
- QROPS in South Africa
- 10 Reasons to use a QROPS. Facts and Myths, Leaving UK Pension Legislation Behind (8)
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