Subject to certain conditions, UK Citizens may move their pension fund offshore and draw retirement income tax free. Leave it on shore and regardless of where UK Citizens live in the world, a UK Pension Plan will be subject to UK tax.

  1. Retirement income can be drawn free of UK income tax from a QROPS, and of Thai income tax, because in Thailand it is offshore investment income and not earned onshore.
  2. With QROPS, what is left goes to the estate and is free of UK inheritance tax
  3. UK Citizens that have been expatriate for at least 5 years may take a 30% tax free lump sum immediately. In the first 5 years offshore this is limited to 25 %, the same as a UK pension
  4. UK Overseas Citizens and their spouse’s pension(s) can be placed in the same QROPS. With QROPS income from the age of 50 (age 55 from 2010) can be drawn with no actuarial reduction for taking income early.
  5. QROPS protects participants against insolvency risk.

 

What Advice You Require

UK Citizens with a retirement fund will want the best advice. An Independent Financial Adviser should produce a full report on any pension transfer.

If you are an expatriate with a UK pension fund, and you are confident that you will never return to the UK to live, you would be foolish not to obtain an analysis and report, to at least know you options. The growth figures required to beat a final salary pensions return are remarkably low due to the QROPS tax free status.

It is fair to say that for the professional expatriate this is the largest tax break that you will ever see from Her Majesty’s Revenue and Customs (UK equivalent to Thai Revenue Department).  If you (and your heirs) can benefit, do not miss this opportunity.