QROPS and moving pensions

[oldwelshman]

Ok.

Not had time to trawl through thousands of posts and only just joined.

I am retiring to LOS in 4 years latest, maybe earlier.(with my Thai partner/wife).

I have done some research into QROPS and it appears I can transfer my pensions, some or all, to another country if I chose to live abroad.

You can then pay tax in the other country or UK.

These schemes approved by UK Govt in listed countries and Thailand is not one of them.

However, apparently Hong Kong is on the list and it is tax free. In addition to this apparently HK has a double tax agreement with Thailand being 0% in HK so meaning I can get all my pensions tax free but can only move the pensions within 6 months of moving.

Do any of you guys on here do this or know more about this?

 

[Oxx]

Too late.  You'll now be clobbered with 25% tax on your pension pot if you're not resident in the country of the QROPS.

 

You are now doomed to paying UK income tax for ever on your pension income.

 

Do, however, take your 25% cash lump sum and put it offshore out of the greedy grasp of Hector.

[HHTel]

Correct.  I've moved most of my pensions to Gibraltar QROPS.  I was hoping to move the rest this year.  The budget stopped that.  Now if you move your pension to a QROPS  scheme and you don't reside in that country, then you're hit with 25% of the whole pot in tax plus paying UK tax for the next 5 years.  Pity we were not told this a year in advance.

[12DrinkMore]

Typical UK government.

 

Saving and investing for retirement is one of the most important lifelong commitments (or should be). The regulations surrounding this should be well thought out, easy to understand and changed at a glacial speed. That is really the only way to encourage people to save. They should all know where they stand at any particular point in life, and be confident that in ten years and twenty years the parameters are not going to be radically changed in some vote getting mess.

 

The UK government exhibits as usual its rank incompetence to to the job it is supposed to do. New schemes are introduced every couple of years, the tax regulations surrounding retirement savings are radically altered regularly and to find out how much the "pot" is worth at any particular time requires a financial consultant.

 

The adversarial political system in the UK is no longer fit for purpose. Indeed none of the politicians in the UK are fit for purpose. The Brexit theater clearly shows the level of incompetence and lack of professional behaviour in comparison to the European negotiators. 

 

Sorry for the minor rant this morning.

[Shackleton123]

As mentioned QROPS is dead in the water. Killed off by the Tory Chancellor who saw it as a way the common or garden working man could actually use someone to help him avoid paying hefty taxes on his retirement fund. "Why should the peasants be allowed to access a route to tax avoidance that we upper crust use to embellish our fortunes" one could almost hear him say. However, it made not a jot of difference to the way the same peasants voted, they continued to vote Tory. Quite why the entire British Working People vote Tory is mystifying the most brilliant minds in politics. Turkeys voting for Christmas.

[Oxx]

1 hour ago, 12DrinkMore said:

Typical UK government.

 

Saving and investing for retirement is one of the most important lifelong commitments (or should be). The regulations surrounding this should be well thought out, easy to understand and changed at a glacial speed.

 

The introduction of QROPS was not something the (then Labour) government wanted to do.  It's the European Union that forced them to introduce QROPS under "Human Rights" legislation.  Since coming to power the Tories have been looking at ways to make them less and less attractive, whilst staying within the letter of the EU requirements.  Following Brexit we can look forward to further restrictions on QROPS, or complete elimination of them.

 

It's also worthwhile pointing out out that QROPS are inherently unfair.  Pension contributions attract a substantial tax allowance, which is normally clawed back during retirement as income tax.  For a non-resident with a QROPS the tax man can't claw back.

[saminoz]

Luckily I moved my pension three years back to Gibraltar (2%).  You could choose to receive it quarterly or annually.

So fat it has been almost seamless.

I found a very good and straightforward adviser in Bangkok.

PM me if you'd like to contact him.

[Jip99]

23 minutes ago, Shackleton123 said:

As mentioned QROPS is dead in the water. Killed off by the Tory Chancellor who saw it as a way the common or garden working man could actually use someone to help him avoid paying hefty taxes on his retirement fund. "Why should the peasants be allowed to access a route to tax avoidance that we upper crust use to embellish our fortunes" one could almost hear him say. However, it made not a jot of difference to the way the same peasants voted, they continued to vote Tory. Quite why the entire British Working People vote Tory is mystifying the most brilliant minds in politics. Turkeys voting for Christmas.

 

Pointless anti-Tory rant........................... hopefully you feel less insecure now.

[peterpop]

I decided not to take QROPS when offered.  In UK I am completely in charge of my SIPP.  That is I buy and sell the shares that constitute my pension.  I do this in a tax shelter [the SIPP] and I only pay tax on that which I draw down and that is after 25% tax free on the sum I am using to draw from.

If you move to QROPS you can finish up in a very badly run pension scheme with on going charges that make a nonsense of  the move to save tax.

My advice is that if you have less than 200,000 uk pds in your pension pot in UK keep it there and be happy.  You have protections in UK that are hard to find elsewhere.

[Oxx]

41 minutes ago, peterpop said:

I decided not to take QROPS when offered.  In UK I am completely in charge of my SIPP.  That is I buy and sell the shares that constitute my pension.  I do this in a tax shelter [the SIPP] and I only pay tax on that which I draw down and that is after 25% tax free on the sum I am using to draw from.

 

I have a QROPS.  I am completely in charge of it.  I can buy and sell the investments whenever I see fit.  I pay zero tax in any country in the world when I draw down.  And I was able to take a 30% tax free sum.

 

In comparison, a SIPPS sucks.  You missed an opportunity.

[HHTel]

I'd forgotten that QROPS came under EU law.  With Brexit, it no longer applies.

 

Also, I agree with Oxx.  I'm in complete charge of my investments.  I can sell/buy on my decision and 'draw down' when I need to.

[oldwelshman]

Need to read up a bit more on this. Latest info on gvt site says if I move it to EEA scheme and live outside EEA then pay 25%. If move outside EEA and transfer to country and live there no tax, but if live in different country 25%.

Guess this link below is no out of date:

http://www.qropsspecialists.com/transfer-uk-pension-thailand/

 

[oldwelshman]

Bear with me please :-) So I can take my 25% tax free form all pensions, that will see me ok for few years. Next looks as if I would have to pay exit tax of 25% if living in Thailand.

If I lived in UK, first £10k tax free then 20% after so would I be able to leave pensions in UK and pay 20% then just transfer via bank accounts?

 

[Oxx]

As a non-resident you still get the regular UK income tax allowances.

 

Your best strategy might be:

 

(1) Take the 25% lump sum and invest it offshore to provide a tax-free income.  This will reduce your UK income requirement, and so your UK income tax.

 

(2) Take a UK pension from the remaining 75%, paying zero tax on the first GBP 11,500 and 20% on income above that (assuming no other relevant UK income) (with marginal rates of 40% and 45% for high levels of income).

 

(3) It may be worth your while taking some of the offshore capital each year to reduce your UK income requirement, and hence reduce UK income tax.  This very much depends upon your personal circumstances.

 

The 25% exit tax only applies if you move your pension to a QROPS.  This is only going to look remotely attractive to individuals with massive pension pots who otherwise would pay a lot of UK income tax on their pensions.

 

 

[oldwelshman]

5 minutes ago, Oxx said:

As a non-resident you still get the regular UK income tax allowances.

 

Your best strategy might be:

 

(1) Take the 25% lump sum and invest it offshore to provide a tax-free income.  This will reduce your UK income requirement, and so your UK income tax.

 

(2) Take a UK pension from the remaining 75%, paying zero tax on the first GBP 11,500 and 20% on income above that (assuming no other relevant UK income) (with marginal rates of 40% and 45% for high levels of income).

 

(3) It may be worth your while taking some of the offshore capital each year to reduce your UK income requirement, and hence reduce UK income tax.  This very much depends upon your personal circumstances.

 

The 25% exit tax only applies if you move your pension to a QROPS.  This is only going to look remotely attractive to individuals with massive pension pots who otherwise would pay a lot of UK income tax on their pensions.

 

 

Yes, thanks for reply. This is how it is looking for me with the change, bloody government. I was hoping to retire earlier had the qrops been left alone as it would have been tax free.

So as you suggest I think I will retire between now and 4 years (age 56 to 60) and take capital 25% with me, maybe some invested and draw on that for few years, then take the max tax free annualy. pretty sure I can live on £18k a year in LOS :-) Then at 67 my state pension also kicks in.

I think 20% on smaller amounts in UK better than a 25% exit tax and probably safer to leave pensions invested in UK as they will continue to grow.

Just need to work out how to get the money from sale of house in UK to Thailand lol proceeds for building house in LOS and rest for living off for couple years also. Too bloody complex and planning required :-)

[Oxx]

36 minutes ago, oldwelshman said:

Just need to work out how to get the money from sale of house in UK to Thailand lol proceeds for building house in LOS and rest for living off for couple years also. Too bloody complex and planning required :-)

 

It's not that difficult.  Open a bank account in Thailand.  Instruct your bank to send the money by SWIFT in GBP.  Most UK banks let you do this online.  Note that you MUST provide a reason for the transfer in the SWIFT instruction, e.g. "construction of property in Thailand". 

 

When the money arrives in Thailand a couple of things might happen:  (1) the bank 'phones you to ask if you accept the exchange rate.  At this point you can ask if they can do better.  They usually can for large amounts. (2) the bank asks you to come in and fill in a form about the sources of the funds and purpose.

 

Doubtless someone will add to this topic "Use an online FX broker, it's cheaper".  (1) It may well not be for larger amounts, and (2) brokers don't have the same financial guarantees as banks, so if there's, for instance, fraud or the broker goes bankrupt your money isn't secure.  I wouldn't use a broker for a life-changing sum of money.

[OJAS]

38 minutes ago, Oxx said:

the bank asks you to come in and fill in a form about the sources of the funds and purpose.

Presumable you are referring to the Foreign Exchange Transaction Form which the OP can download for completion via the following link in case he wishes to be forewarned and forearmed:-

 

http://www.bangkokbank.com/BangkokBankThai/Documents/Site Documents/GPSD/FXTransactionForm_15032011.pdf

 

[oldwelshman]

18 hours ago, Oxx said:

 

It's not that difficult.  Open a bank account in Thailand.  Instruct your bank to send the money by SWIFT in GBP.  Most UK banks let you do this online.  Note that you MUST provide a reason for the transfer in the SWIFT instruction, e.g. "construction of property in Thailand". 

 

When the money arrives in Thailand a couple of things might happen:  (1) the bank 'phones you to ask if you accept the exchange rate.  At this point you can ask if they can do better.  They usually can for large amounts. (2) the bank asks you to come in and fill in a form about the sources of the funds and purpose.

 

Doubtless someone will add to this topic "Use an online FX broker, it's cheaper".  (1) It may well not be for larger amounts, and (2) brokers don't have the same financial guarantees as banks, so if there's, for instance, fraud or the broker goes bankrupt your money isn't secure.  I wouldn't use a broker for a life-changing sum of money.

Will look into this over next few months. I have transferred up to £15k before with no issue. This will be a bit more though to build house. Seeking pension advice in work but looks like leave it in UK, live off tax free pot and draw £10k a year from UK :-)

[NancyL]

I know many Brits here who invested their life savings in dodgy QROPS.  Schemes where their money was locked up for years in investments that went belly up and their so-called "Financial Advisor" earned their multi-year commission up-front.  Then they found that they had none of the protections from any gov't agency that they would have had if they'd left their money in the U.K.

[Oxx]

3 hours ago, NancyL said:

I know many Brits here who invested their life savings in dodgy QROPS.  Schemes where their money was locked up for years in investments that went belly up and their so-called "Financial Advisor" earned their multi-year commission up-front.  Then they found that they had none of the protections from any gov't agency that they would have had if they'd left their money in the U.K.

 

Then they were fools.  And a fool and his money are soon parted.

 

Either they were dealing with a non-regulated financial adviser, or they didn't read and understand the paperwork.  (And if they didn't understand it they should have had the common sense to walk away.)

 

And anyway, an "adviser" does what the name suggests:  advises.  It's the client who makes the decisions and takes the responsibility for the decision made.

 

Oh, and anyone rational would have used a financial adviser on a fee basis, rather than a commission one.

 

The fact that there are fools in this world doesn't invalidate the manifold advantages that QROPS have held for expats.

[NancyL]

Oh, the "financial advisers" claimed licensing in their home countries, but since both parties and the transactions occurred overseas the regulatory agencies had no interest in pursuing complaints and the Thai regulators don't much care about foreigners bilking other foreigners.  And yes, I agree that one should employ a financial adviser on fee basis, not someone who is earning an commission. 

[oldwelshman]

Due to the changes in tax and the 25% exit fee I decided to leave all pensions in UK. Am now planning to seek a pension plan from a UK company that offers wealth management/pension advice etc. at worth 20% is better than 25% anyhow.

I have also given up the thought of getting married in Thailand due to red tape and will do registry office in UK then ceremony in Thailand :-)

[Oxx]

11 minutes ago, oldwelshman said:

Am now planning to seek a pension plan from a UK company that offers wealth management/pension advice etc.

 

If you need advice, use an IFA who will be impartial.  A pension company representative will not be independent and will quite possibly push you toward products that maximise the company's profits, not your wealth.

 

You can find an IFA near you at https://www.unbiased.co.uk/

[oldwelshman]

1 hour ago, Oxx said:

 

If you need advice, use an IFA who will be impartial.  A pension company representative will not be independent and will quite possibly push you toward products that maximise the company's profits, not your wealth.

 

You can find an IFA near you at https://www.unbiased.co.uk/

Yes thanks. Been on there before going to try these now http://www.hl.co.uk/

Very good reputation.

 

[Oxx]

10 hours ago, oldwelshman said:

Yes thanks. Been on there before going to try these now http://www.hl.co.uk/

Very good reputation.

 

Just be aware (a) they are not independent, and (b) they probably won't have much experience of expat-related issues.  (HL doesn't allow expats to open an account with themselves.  Expats are not their market target.)

[i claudius]

As mentioned QROPS is dead in the water. Killed off by the Tory Chancellor who saw it as a way the common or garden working man could actually use someone to help him avoid paying hefty taxes on his retirement fund. "Why should the peasants be allowed to access a route to tax avoidance that we upper crust use to embellish our fortunes" one could almost hear him say. However, it made not a jot of difference to the way the same peasants voted, they continued to vote Tory. Quite why the entire British Working People vote Tory is mystifying the most brilliant minds in politics. Turkeys voting for Christmas.

The reason they vote Tory is that to vote for the likes of Corbyn and Abbott is beyond comprehension.

Sent from my SM-A720F using Thailand Forum - Thaivisa mobile app

[oldwelshman]

18 hours ago, Oxx said:

Just be aware (a) they are not independent, and (b) they probably won't have much experience of expat-related issues.  (HL doesn't allow expats to open an account with themselves.  Expats are not their market target.)

Yes I know they dont to expat, but they do pension plans and as I am currently in UK can do plan for me. I will also check the unbiased site also before deciding.

 

[Negita43]

Obviously a lot of knowledgeable people here.

 

A couple of years ago because I was approaching 75 and the tax regime then was onerous if I died (50% I believe) I started moving my SIPP investment!!!! to ISA's

 

Anybody know what happens to my ISA if I choose to leave the UK permanently

 

 

 

[poohy]

Qrops related

Beware ....Gibraltar is not happy about requests out from qrops there to Sipps or other jurisdictions to "obtain benefits eg for Flexible access

Transfers are being refused or put on indefinite hold

[topt]

1 hour ago, Negita43 said:

Anybody know what happens to my ISA if I choose to leave the UK permanently

Theoretically you cannot add any more money to it if you are non resident. https://www.gov.uk/individual-savings-accounts/if-you-move-abroad-or-die

 

You should still be able to change the holdings within.