Best QROPS provider, best QROPS jurisdiction
 
Based on the latest HMRC QROPS list there are over 3,700 providers covering 45 jurisdictions. This abundance of choice can make selecting the best QROPS provider a difficult and time consuming process. So how do you go about it? In what follows we will consider the whole selection process…

Overseas pension transfers are not suited to everyone. Before you begin searching for your ideal QROPS provider you should fully inform yourself of what a QROPS is. It can be a good idea to consult the answers to frequently asked questions on the subject along with familiarising yourself with the benefits and drawbacks of QROPS

Having established that moving your pension into a QROPS structure is the right course of action for you the next stage is to select the best QROPS jurisdiction. There are, however, points that you should bear in mind when you are going through the selection process.

As previously discussed, inclusion on HMRC’s list does not confirm that a pension is qualifying or not. Also, it may exclude other pension providers who choose not to be listed. It is, though, a good place to start since it shows all QROPS jurisdictions. In addition, the general principle behind it is sound i.e. the listing of all QROPS providers according to where they are based.
 
To compile your own personal list it is probably best to consider jurisdictions first and then providers as this could narrow the field more quickly for you
When choosing which is the best country for you to transfer your UK pension to it is important to assess your objectives for retirement. For example;
 

  • Do you intend on retiring to the UK or not
  • If you are planning on retiring outside the UK where do you see yourself living
  • What are the tax rules of the country in question

In most cases your pension should be able to grow tax free. Then, if you decide to return to the UK, you can take advantage of the reduced tax rate applicable to qualifying overseas pensions.
 
Other considerations that can help you select the top QROPS destination for you include;
 

  • Minimise tax burden – if a jurisdiction applies tax ensure that it has a Double Taxation Agreement (DTA) with your retirement destination. This prevents you from paying more tax than is strictly necessary. Confirm all tax rates that you may be liable for
  • Security – Is the industry regulated and is there a financial ombudsman? How stable is the country? Is there any financial, political, or economic risk?
  • Protection – Does a financial compensation scheme exist to cover investors in the event of a financial institution failing? How well funded is the scheme and what level of cover is offered?
  • What is the maximum tax free pension commencement lump sum (PCLS) allowed?
  • Accessibility – You should not be allowed to access your pension prior to the UK minimum retirement age however, some jurisdictions will give you fully flexible access. If having unrestricted access to your funds on retirement is important ensure the country in question provides this facility since not all do

Having established which QROPS jurisdictions best meet your requirements the final stage is to select the top QROPS supplier for you.

All pension companies have to follow the rules of the jurisdiction in question. On top of this, they may implement their own restrictions. It is therefore important to keep as much flexibility as possible. Also, since a QROPS is an investment wrapper it will only positively affect any investments held. As a result the top QROPS providers should be secure, flexible, and efficient, therefore providing;
 

  • Security of being monitored by an appropriate regulatory regime if applicable
  • Protection via membership of a suitable financial compensation scheme
  • Non restricted investment options – if a restriction is in place query why. It could be implemented to protect investors
  • Competitive charging structure
  • Ability to transfer a QROPS free of charge between jurisdictions if required
  • Segregated pension assets
  • Efficient administration
  • A secure, longstanding business model

Lastly, and critically, confirm that the QROPS provider is currently qualifying under HMRC’s rules and that there is no reason for that to change

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Selecting the best QROPS providers and jurisdictions written by Liberty Wealth on June 6, 2015 average rating 4.4/5 - 23 user ratings