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Dealing with offshore pensions when its time to move back home
| Published: | 13 May at 6 PM |
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Many Brits living overseas intend to stay in their chosen country of residence for the rest of their lives, but unforeseen circumstances may force the decision to return to the UK.
Working or retiring overseas is a dream for many, the majority of whom don’t give a thought to the complications of moving back home until they’re forced to. Older expats, whether working or retired, will need to carefully consider their financial futures, including investment decisions made whilst overseas.
Since their introduction some years ago, QROPs personal pension plans based in offshore financial jurisdictions have been a mainstay for many expat investors. If retirement or working plans have to be rethought in hurry, it’s essential to know what can and what can’t be done with your QROPs.
Whether a return to the UK is made for career or personal reasons, there’s no need to be concerned about complications regarding your pension transfer. When the framework for this investment was constructed, investors’ decisions to move back to Britain were anticipated and outcomes were incorporated into the design.
Basically, the QROPs can stay in situ and, when benefits are taken, taxes levied will be similar to those drawn on a UK pension. Several exceptions to this rule can also be dealt with in a straightforward manner.
For example, expats who wish to continue working and making further contributions attracting tax relief may be better off transferring a QROPs to a Self Invested Personal Pension (SIPPs). For former expats in other situations, cost efficiencies over and above those provided by a QROPs can also be had with a SIPPs.
Should pension withdrawals from a QROPs have already been made whilst the returning expat was living overseas, tax implications may result. According to the Inland Revenue, to avoid paying tax, the time spent away from the UK must be longer than five consecutive and complete UK tax years. It’s best to get advice on this if there’s any doubt.
Lastly, for those planning the next stage in their lives, pension arrangements should be high on the to-do list. Solutions such as plans set across multiple jurisdictions give the flexibility to transfer seamlessly between jurisdictions, thus allowing for unscheduled lifestyle changes.
Working or retiring overseas is a dream for many, the majority of whom don’t give a thought to the complications of moving back home until they’re forced to. Older expats, whether working or retired, will need to carefully consider their financial futures, including investment decisions made whilst overseas.
Since their introduction some years ago, QROPs personal pension plans based in offshore financial jurisdictions have been a mainstay for many expat investors. If retirement or working plans have to be rethought in hurry, it’s essential to know what can and what can’t be done with your QROPs.
Whether a return to the UK is made for career or personal reasons, there’s no need to be concerned about complications regarding your pension transfer. When the framework for this investment was constructed, investors’ decisions to move back to Britain were anticipated and outcomes were incorporated into the design.
Basically, the QROPs can stay in situ and, when benefits are taken, taxes levied will be similar to those drawn on a UK pension. Several exceptions to this rule can also be dealt with in a straightforward manner.
For example, expats who wish to continue working and making further contributions attracting tax relief may be better off transferring a QROPs to a Self Invested Personal Pension (SIPPs). For former expats in other situations, cost efficiencies over and above those provided by a QROPs can also be had with a SIPPs.
Should pension withdrawals from a QROPs have already been made whilst the returning expat was living overseas, tax implications may result. According to the Inland Revenue, to avoid paying tax, the time spent away from the UK must be longer than five consecutive and complete UK tax years. It’s best to get advice on this if there’s any doubt.
Lastly, for those planning the next stage in their lives, pension arrangements should be high on the to-do list. Solutions such as plans set across multiple jurisdictions give the flexibility to transfer seamlessly between jurisdictions, thus allowing for unscheduled lifestyle changes.
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