QROPS are relatively new and relatively complicated; this has allowed product providers and salesmen to deliberately obscure the true facts or just to give false information because they don’t understand their product.
This article covers the frequently told lies, and uncovers the truth.

New Zealand & 100% Cash Out
In Guernsey, where most QROPS providers are based, only 25% of the fund can be paid in cash. In New Zealand 100% can be! Many Guernsey Trustees and their salesmen will tell you this is illegal – well, if it is then HMRC don’t agree with them!! If set up properly a NZ QROPS can totally legally, and with the full agreement of HMRC, provide 100% Cash to someone who is 5 yrs+ non UK-Resident. Could it possibly be that some Guernsey QROPS providers are attacking this because they can’t offer it? Incidentally, it is illegal to cash out before 5 yrs+ non UK-Residency, so companies who offer this are promoting a different type of lie.

Charges – how transparent are they?
You pay for the product and the service, and if the service is poor you can move elsewhere, right? Wrong! Almost all QROPS providers have an exit penalty. So if they provide poor service so you want to move away it is you who has to pay for their shortcomings. No ethical company should have an exit penalty! One company in Guernsey goes even further by making it virtually impossible to transfer away from them – amazingly their behaviour is not illegal in Guernsey, but it would be in the UK.

55 is the earliest possible retirement age – or is it?
Most QROPS providers will tell you that apart from ill-health or special occupations (e.g. footballers), 55 is the earliest allowed retirement age. This is perfectly true in Guernsey! But, if you’ve been outside the UK five years then you can possibly retire, and take 100% cash, before this in NZ where local rules often permit it.

A QROPS is for Life
You have your pension for the rest of your life, so you will stay with a QROPS (even if you move to a different provider) for the rest of your life, right? Wrong!
You absolutely should move out of your QROPS once you’ve been 5 yrs+ non UK-Resident. If you don’t you risk losing all your benefits!
If you return to the UK with A QROPS, even if just for a year, your QROPS is now under UK rules, so you lose all the benefits!
What you should do is transfer your QROPS to a QNUPS, a Qualifying Non UK Pension Scheme. This works exactly the same as a QROPS, but if you return to the UK it isn’t hit by UK rules so you keep all your benefits. Lots of people return to the UK, often without prior planning. It is essential that they are protected if this happens.
Most QROPS providers don’t have a QNUPS. To sell a QROPS to a client without having a QNUPS is risking the client’s financial health!

So, Guernsey is not a good place to have a QROPS?
No, this is not true at all. Guernsey is an excellent location for a QROPS, as is New Zealand. An independent QROPS provider will offer the choice of both locations, as which is best depends totally on your circumstances. Any provider who says that one is better than the other is telling lies or doesn’t understand the product.

How do I find the right QROPS provider
Whether you are dealing with a QROPS provider direct (and truly independent providers don’t deal direct, but will refer you to an independent adviser), or through an adviser, ask them all these questions. If you aren’t satisfied with every answer don’t deal with them. It is your money, don’t let someone take it off you unless they deserve your trust.

For more information please contact
Keith Boniface on keith@brooklandspensions.com

On the 6th of April 2006, HMRC introduced new legislation on transferring frozen pension funds from the UK to overseas QROPS solutions. This change means that those who are or will be non-UK residents can transfer their UK pension funds without any tax deduction and be able to draw them without UK tax liability.

Background to QROPS

For a number of years, British expatriates and those moving overseas have been faced with difficulties when trying to sort out their UK pensions, as the pension is usually stuck back in the UK. One of the main issues has been the tax treatment of UK pensions and until recently it has been virtually impossible to move a UK pension to an overseas pension without being forced to pay basic rate tax on the transfer. In some cases HMRC would also levy a staggering 55% tax liability on the clients.

The new legislation on QROPS comes a welcome relief to thousands of expats around the world who may have been a member of a UK pension scheme, moved abroad and either lost or forgot about their UK pension. The beauty of QROPS is that they allow you to reclaim the pension money that would normally be stuck in the UK, transfer it to an offshore investment in your name and regain control and of course, access to your fund.

If you are interested in discussing QROPS in more detail, then please visit the apensionloan.com website for more information.

The service is completely free to clients and it allows UK pension holders to compare their existing pension arrangements against other pensions in the market to see if there is any value in transferring their pension.

No advice is given on the site as all leads are referred to an expert panel of providers including a firm of annuity specialists who will check to see if clients could extract more value from purchasing a different annuity to the one offered by their pension provider.

For more information visit Pension Options.