QROPs

Known as Qualifying Recognised Overseas Pension Scheme or a QROPS, this is an overseas pension scheme that meets certain criteria set by HM Revenue & Customs (HMRC). A QROPS can accept transfers from UK pension schemes, including personal and workplace pensions. There are a number of benefits to doing so, but there are also some important areas you need to consider.

One of the biggest benefits of transferring your pension pot overseas is that you may be able to take advantage of lower taxes. In some countries, pensions are taxed at a lower rate than in the UK. This could mean you eventually receive a bigger income when you retire. With a QROPS your beneficiaries may be able to take their inheritance as a lump sum, which could be taxed at a lower rate than an income drawdown.

However, you need to consider if you move to a country with a different currency, your pension pot could lose value if the exchange rate changes. There are also some countries where pensions are not subject to the same level of protection as they are in the UK, which needs considering. It’s also important to note that not all countries have QROPS schemes in place. And, even if a country does have a QROPS scheme, it may not be recognised by HMRC.