USA residents can transfer their UK pensions to a QROPS
From April 2006 the possibility exists for non-UK residents, or those who intend to leave the UK, to transfer their UK pension benefits to QROPS. This enables you to transfer your UK pensions to a country or jurisdiction that offers advantages you could only dream of in the UK.
However until 2010 it was impossible for USA residents to transfer their UK pensions to QROPS. There are several 401K Pension plans in the USA which have been granted QROPS status by HMRC but the IRS or Internal Revenue Service does not recognise UK pension transfers due to the structure and differences in tax benefits. It does not look like that is going to change either. Other, non USA based QROPS trusts were not able to meet the strict tax reporting requirements of the IRS. If a transfer was undertaken by a US resident into such a scheme this would lead to a tax charge. These Trusts will never be acceptable to the IRS, as they are unable to meet the reporting requirements, given the way they are structured.
Knowing the problems surrounding the reporting requirements, an IRS friendly QROPS solution was created for US residents. We understand that a UK pension scheme transfer for a USA resident has to meet IRS tax reporting requirements and be acceptable as a foreign Trust. The solutions we offer are fully recognised by the IRS under DTA (Double Taxation Agreement) and as such meet all IRS reporting requirements, as included in FATCA amendment IRB 2010-60.
QROPS can offer the following benefits for USA residents :
-No UK Tax on income. UK pensions are taxed at source, no UK tax is withheld from a QROPS.
-You are able to leave the remainder of your pension fund to your beneficiairies on your death. Most individuals will purchase an Annuity or Alternatively Secured Pension (ASP), once chosen, your UK pension is of no use to your partner or children upon your death. Whereas your QROPS pension can be left to whoever you wish.
-NO UK Inheritance Tax payable on a QROPS.
-You do not have to purchase an annuity or ASP (Alternatively Secured Pension) at age 75. This gives you more control. Your existing UK provision will offer you a low income once a fixed annuity of 3.25% p.a. has been purchased by your UK pension provider, that would then be your return or income for the rest of your life. Your QROPS pension could pay you an income of around 10% p.a., three times that what a UK pension would have given you. With QROPS your fund continues to grow even whilst taking an income. Which can then give a higher income later on in life.
The UK government and the proposed pension reforms which include increasing retirement age, higher taxes on pensions, and imposing more restrictions etc. Once you have transferred your UK pension to a QROPS your pension is out of scope of further changes in UK legislation.
- With QROPS your fund investments can be structured in US Dollars and your income can be paid in US Dollars to a USA bank account.
-QROPS allow you to take control back.
-No Tax on your pension fund as they continue to grow. UK pension funds are taxable. With QROPS your fund is not taxable, and can continue to grow Tax free.
-Much more investment freedom and control offering a wider range of investment classes, anythng from cash, shares, commodities, gold to property (including overseas property) and potentially much higher growth than UK pensions.
By transferring your UK pensions to QROPS, the assets are no longer subject to UK tax. For many expats the avoidance of UK taxes on pension income and the dangers of additional taxes are an important consideration.
Transferring your UK pension to QROPS if suitable given your own particular circumstances, can only improve your position.
Most importantly, once moved to a QROPS you have control over your money. If left in your UK pension arrangements it is highly likely that additional restrictions will be put in place which will adversely affect you.
We are now able to offer USA residents IRS friendly and compliant low cost QROPS transfers. Without any doubt QROPS is of great benefit to anyone who can do so. Especially given the latest proposed changes in UK legisltation by the government. Which allows Final Salary (Defined Benefit) pension scheme trustees, to lower transfer values at their discretion. Given this, you should seriously consider QROPS before it is too late.
Take the first step to financial freedom, contact us now for Free no obligation consultation. Complete the form below or send us an e-mail info@the-qrops-specialist.com Alternatively call us on (+44) 020 3239 3219 ( UK ) or (+34) 657360286 (Spain). Remember, we do not have access to your pension fund either before, during or after the transfer.
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Global Administration Office: The QROPS Specialist, Cerros del Lago 28.1, 29611 Istan, Marbella, Spain
Every care is taken to ensure that the information on this site is accurate and up to date. However, we cannot accept any liability for error or omission with regards to the content of the site. The Qrops Specialist cannot be held liable for any tax payable by the policy holder or otherwise now or in the future that may arise from a pension transfer, whether it be UK tax, elsewhere or the country/region where the policy holder is resident. We operate websites dealing mainly with QROPS and pension transfers. The sole aim of this website is to offer the visitor information concerning QROPS and pension transfers and its content should not be seen as financial advice. We operate websites dealing mainly with QROPS and pension transfers. The sole aim of this website is to offer the visitor information concerning QROPS and pension transfers and its content should not be seen as financial advice. Please note that we are an information only service and do not provide advice, The Qrops specialist act as an introducer of business to the specialist pension transfer companies.
QROPS USA Residents
