A transfer of clients' benefit rights in an European Union registered pension scheme to a pension scheme which is established offshore (i.e. outside of the 'home' country – this is important!) may be treated as a recognised pension transfer, if the receiving pension scheme is a Qualifying Recognised Overseas Pension Scheme (QROPS).

QROPS is a fantastic option if you are already an expatriate or are shortly planning to permanently leave your home country.

For example, the UK HMRC has defined a QROPS as a scheme that meets the following:

1. meets the conditions of being an overseas pension scheme under the Finance Act 2004, and
2. meets the conditions of being a recognised overseas pension scheme under the Finance Act 2004, and
3. meets certain other conditions held under section the Finance Act 2004.

The reason that a QROPS pension transfer is such an attractive option is due to the fact that the initial transfer into the QROPS is tax-free (up to a lifetime limit of GBP1.8Million!). Whilst your pension is stuck in an onshore pension scheme, it is subject to certain restrictions, limitations & obligations that will apply - many of them legislative or lost in the 'fine print'. You should view your pension as an asset & as such, should be managed in an effective manner. Once the limitations of the pension scheme are fully understood and how a QROPS pension transfer works, together it becomes apparent why potential clients who qualify for a QROPS, utilise this option.

If you have a current or frozen European Union member country pension, between the age of 18 and 75, are a non-tax resident or are planning to become a non-tax resident of your home country within the next 1 year, you can qualify for a QROPS pension transfer.

Also, if you have officially worked in the European Union (EU) as an expatriate of any nationality for any length of time and has either now returned home or are about to repatriate, you may qualify for a QROPS pension transfer.

It is understood that a pension transfer into a QROPS scheme will become widely available across most EU member countries in a relatively short period of time (due to implemented 1992 EU, Freedom of Capital Law).

Under a QROPS pension transfer, a Trust will be appointed in an offshore jurisdiction with the aim of providing a cost effective, tax efficient and safe investment - ultimately for clients' beneficiaries too. The Trust will effectively purchase an insurance 'wrapper' that will encompass all the clients' retirement planning requirements and ensure that these investments are properly managed. Typically, the type of 'wrapper' that will be purchased by the Trust will be an Offshore Personal Portfolio Bond (PPB) - this bond will hold the ideal spread of investments suitable for the pension portfolio. Not only is the PPB a very effective, singular administration vehicle, but it also provides an efficient method of buying and selling investment funds within the portfolio. This is because the PPB provider transacts large volumes of investments; therefore the usual, initial spreads are avoided due to the PPB providers' bulk purchasing power.

If you are eligible for a QROPS pension transfer, it is something that you should definitely consider as the inherent flexibility and benefits far exceed the costs. It is an easy way to increase the value of your estate.

However, should you wish to maintain your current tax residency and domicile status BUT you still want to enjoy a pension that benefits from an investment in international funds and that is managed for you under the safety of a Trust - we can transfer your current pension into a Self Invested Pension Plan (SIPP). Note, although a SIPP can be managed offshore, due to the tax residency status of the holder its growth and income are subject to domestic taxation.