Do You Have A Pension Fund Languishing in the UK?

If you have never heard of a Qualifying Recognised Overseas Pension Scheme [QROPS] here is a brief summary of how it works.

QROPS is a pension scheme set up outside the UK, which is regulated as a pension scheme in the country in which it is established. In the UK a QROPS is a scheme recognised by Her Majesty’s Revenue and Customs Office [HMRC] as meeting certain standards and conditions equivalent to a UK Pension. This approval allows anyone with a UK registered pension who is living outside the UK, or is intending leaving the UK, to transfer their pension offshore.

If you are a British expatriate and live outside of the UK [or if you are planning to leave the UK] you are eligible to transfer existing pension provision into an approved QROPS Pension Transfer in South Africa.

The conditions for such a transfer to a recognised QROPS schemes are as follows:

• You will need to be a non-UK resident for five years [UK tax years run from 6 April to 5 April]
• It must be a private pension as opposed to a state pension
• You must not currently be drawing any annuity from this pension

Major Benefits of Transfer

• All tax is legally avoided
• You can appoint your own beneficiaries and will not be subject to the strict UK laws on eligible beneficiaries
• In South Africa you will have no tax liability, neither CGT nor income Tax, should you repatriate any funds from a QROPS into South Africa

You would require confirmation from the transferring fund as to whether or not you were taxed on the benefit in the UK prior to the transfer. This will indicate whether the contributions are regarded as voluntary or compulsory and whether a tax certificate may need to be issued.

For more information you are welcome to contact us.