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Pensions for British Expats We are able to introduce clients to a UK qualified recognised overseas pension scheme that has been approved and recognised by HMRC (Qrops 501712). The plan is domiciled in Guernsey . T he Pension Plan provides individuals with accrued United Kingdom (UK) pension benefits, and who are considering leaving the UK or who are already non-residents, a bespoke tailored solution. The solution provides individuals with a greater flexibility in their retirement options, with tax efficiency, a choice of investment management and peace of mind that all remaining funds within the Plan upon death are paid to their nominated beneficiaries. All with the security that their funds are administered in the fully regulated jurisdiction of Guernsey, Channel Islands.
Guernsey is one of the foremost offshore financial centres in the world. It enjoys a reputation world-wide as an excellent jurisdiction for establishing financial structures. From September 2009 total funds under administration in Guernsey were £182 billion, a sure sign of confidence from it’s international clients. It is a well regulated and politically stable environment with good communications and excellent infrastructure including local access to many of the world’s leading legal and accounting practices.
With Guernsey lying central to the UK and Europe it provides an established business centre for international pension management. The Trustees and the administrators of the Plan, is a Guernsey company fully regulated and licensed by the Guernsey Financial Services Commission. They are also part of a group of companies who in total administer in excess of £1.5 billion of client funds.
Qualified Recognised Overseas Pension Schemes (QROPS)
These types of schemes have been developed with the recent changes in UK pension legislation in mind and the need for schemes to be ‘recognised’ by Her Majesty’s Revenue and Customs (‘HMRC’) Individuals generally may have been members of an Employer Sponsored Pension Scheme or Personal Pension arrangement pre 6th April 2006, commonly known as ‘A-day’. Transferring these schemes into a QROPS provides tax neutrality, a wide range of options and greater flexibility.
Post A-Day schemes are more complex as they have very few transfer options and care must be taken to ensure that a transfer does not trigger chargeable and benefit crystallization events.
The Pension Plan is designed to enable non UK resident individuals or individuals who are about to leave, who have accrued pension benefits in the UK, to transfer these out. In order to be in a position to receive transfers from authorised UK pension schemes, the Plan needs to be registered as a QROPS with HMRC. The Pension Plan is a retirement scheme and is therefore designed to provide for one’s retirement with defined retirement/termination events as follows:
Key Features Normal Retirement Age of 65; Early Retirement Age of 50; Death & Permanent Disability; However there may be greater flexibility, determined by an individual’s circumstances, which will need to be considered on a case by case basis. The Plan Benefits
Payments of Benefits from the Pension Plan
The Administrators of the Pension Plan are required as part of their registration as a QROPS provider to report to HMRC any payment from the Plan, or certain action which may be treated as a deemed payment, in respect of the relevant member. Double taxation treaties come into effect whereby the member will be subject to either normal UK income tax or this may be off-set by disclosure in the country in which they are resident.
However, the Trustees do not have to notify HMRC if the relevant member is a person to whom the member payment charges set out in the Finance Act 2004 do not apply. The relevant member payment charges do not apply unless the member:
is resident in the UK when the payment is made (or treated as made), or although not resident in the UK at that time, has been resident in the UK earlier in the tax year in which the payment is made (or treated as made) or in any of the five tax years immediately preceding that tax year. A payment or deemed payment would include a transfer of the pension fund away from the Pension Plan.
The potential way in which members of the Plan could reduce or eliminate the impact of member payment charges is: Through non-residence: if the member is not resident in the UK when the payment is made and has not been so resident for five tax years preceding the tax year in which the payment is made (paragraph 2 Schedule 34 Finance Act 2004) then no member payment charges will be imposed on payments from the plan.
The Trustees will not have to report to HMRC a payment (or a deemed payment) if the member is not tax resident in the UK when the payment is made and has neither been UK resident in that tax year nor in any of the previous five tax years. Therefore with the Trustees of the Plan located in Guernsey where no local taxes are due, the member may receive distinct tax advantages.
Fees Please contact us for Schedule of Fees and introduction to the Trust for further information.
DISCLAIMER This summary is of a general nature only and is not intended to be relied upon, nor to be a substitute for professional advice, or used in formulating any personal decisions without first seeking such advice. No liability is accepted for any consequences arising from any transactions in connection with this summary. The benefits in this summary may vary according to residence and domicile and different rules apply to different individuals. No warranty regarding the appropriateness of investing in this type of structure is being given and none of the above comments should be construed as tax advice. You should always take independent advice, as personal circumstances may mean the comments above do not apply.
Advice should be sought from tax advisors as to the tax implications on payment of benefits in the individuals country of residence.
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