Sunday, October 6, 2013

How To Make Overseas Pension Transfers

If you are an expat with a pension in your home country, you might be thinking there is no point in moving your funds offshore. After all, the money is secure, you might not need it for a while and you trust your pension pot back home. Today, we invite pension expert Sofia Kluge, Web Editor & Community Manager at OPP award winning foreign exchange comparison site to provide some tips on making overseas pension transfers

Why It Pays To Transfer Your Pension

What you may not know is that by transferring your pension to your new home country, you will be free of the restrictions and tax laws governing your pension right now. By transferring your pension you could potentially be thousands of pounds better off and have better control over what happens to your money once you retire. You’ve worked hard for the money in your pension so doesn’t it make sense to transfer your pension without risk?

Pension Transfer Requirements

In order to transfer your UK registered pension, you will need to transfer it to a Qualifying Registered Overseas Pension Scheme (QPROPS). The trustees of your current pension scheme will check that the scheme you are planning to transfer is a QPROPS and that it complies with HMRC requirements. 

What You Need To Know About QPROPS

QPROPS is a set of regulations set down by the HMRC. It is essential that the overseas pension scheme you select for your transfer comply with these regulations. If it doesn’t, you may be liable to pay a huge 55% unauthorised transfer charge. You won’t usually need to pay any UK tax fees because you will not be living in the UK when your QPROPS payments are made to you. 

QPROPS was first introduced in 2006 and was designed to give people living in the UK to emigrate to another country and to take their pension with them. Whether you are going to be drawing your pension in a couple of years or you plan to continue paying into your pension for many years to come, transferring it to your new home country makes a lot of sense. 

The QPROPS Process

Once you have decided that you would like to transfer your pension, you can speak to a QPROPS advisor to discuss the money transfer and the best way of organising everything. 

Your QPROPS service will usually include the following:

  • A free initial consultation to ascertain your personal circumstances.
  • If you decide to proceed with the QPROPS transfer, your advisor will give you a personalised report detailing their recommendations.
  • Your advisor will then go over the recommendations to ensure you are clear on all points and have everything you need to make an informed choice. 
  • If you are happy to proceed, your advisor will issue the relevant forms to you so that you can complete and sign them. 
  • Your QPROPS advisor will then arrange the transfer of money from your UK scheme into your new QPROPS scheme overseas. 
  • Once the money transfer has taken place, your QPROPS advisor will make all of the arrangements to ensure your monies are made available to you upon your retirement date.

Choosing The Right Pension Transfers Company

Before you decide to go ahead with your pension transfer, it pays to shop around for the right advice. The HMRC website offers plenty of advice on QPROPS transfers and your pension transfers broker will also give you all the information you need about the process. 

Shop around for an international money transfer broker with years of experience in transferring pensions to a broad spectrum of different countries or choose a broker that is experienced in the country you are emigrating to. Ensure the FCA regulated currency broker is authorized and regulated. They will be aware of the rules and regulations that are specific to that country and ensure a swift and smooth transfer. 

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