AsiaLIFE

Life for expats from the U.K. could now be even better thanks to a pension scheme put in place by the British government some three years ago. But, despite the fact that QROPS has been around for quite some time, it would appear that not everybody is in the know!

QROPS (Qualifying Recognised Overseas Pension Plans) was launched in April 2006 by the British government as a way to make expatriate retirement easier for Britons or foreign nationals who have accumulated onshore pension funds in the U.K. It allows Brits to retire abroad while taking their pensions with them. Upon its launch in 2006, QROPS was greeted with headlines touting the fact that well-to-do British expats would be able to enjoy tax-free retirement abroad. However, despite the publicity it appears that not everybody knows about the policy.  

Prior to 2006 British citizens moving overseas would have to leave their U.K. pensions behind. They would remain ‘trapped’ and almost impossible to move to an overseas or offshore pension scheme without paying a basic tax on the transfer. With QROPS, that has all changed. Now non-U.K. residents can transfer their U.K. pensions to an overseas pension scheme without having to pay tax on the transfer. They can also draw their pensions without having to worry about paying tax back home. In addition, instead of their spouse or children getting only a portion, or none, of the pension in the case of death, all assets can be transferred to their beneficiaries.

To take advantage of QROPS certain conditions have to be met. The overseas scheme to which the U.K. pension is transferred must be one recognised by Her Majesty’s Revenue and Customs Office (HMRC). The scheme also has to be in an approved country. The amount transferred needs to remain in the scheme for at least five years before it can be used. It also has to be proved that 70 per cent of the scheme is to be used for retirement.

In some countries you do not have to declare what you are using the fund for after the five-year period. Transfers to schemes not approved by HMRC could result in a tax penalty of between 40 to 55 per cent. At present the list of approved locations offering such pension schemes includes: the Isle of Man, Guernsey, Jersey, Switzerland, Australia and New Zealand. There are about 1,700 QROPS schemes to choose from. If you are one of the three million Britons living overseas, including the many British expats living in Cambodia, perhaps you should consider taking advantage of QROPS.

Interested British expats should seek the advice of a personal finance expert to help choose the right scheme. There are thousands of schemes to choose from and you want to make sure that you choose the right one for you and your lifestyle.

Trevor Keidan is Managing Director of Infinity Financial Solutions. This company provides impartial, tailor-made, personal financial advice to clients in Cambodia and Southeast Asia. Should you wish to contact Trevor, please send an email to: This e-mail address is being protected from spambots. You need JavaScript enabled to view it