Tuesday 31 January 2012

Changes to QROPS over the coming months are the biggest since being released in 2006.

By Joe Davis


QROPS or Qualified Recognized Pension Scheme was first started by the HMRC in April 2006 to help United Kingdom pension holders retiring abroad through tax inducements on their monthly income. This should be 0, depending on each person's situation. This can lead to a major amount of cash over the duration of the pension for the bearer, not taking into consideration the compound effect of investing which may add even more for your pension.

Another huge advantage to UK pension holders is the proven fact that there can again be zero to tiny tax owing on inheritance tax for your loved ones again a big saving over the 55% that's charged in the UK!

Presently the HMRC (Her Majesty's Revenue Collection) are making some important alterations to the jurisdictions and tax advantages that specific areas have so it is surely worth investigating what the modifications may be.

For example it is currently feasible to take your UK pension as a 100% lump amount by changing to a New Zealand QROPS. It is certain that due to changes in the rules recommended by HMRC, the United Kingdom tax authority; this loophole will be closed from 6th April 2012.

Modifications in United Kingdom pension legislation are often brought into effect at the start of the United Kingdom tax year. HMRC released draft legislation recommending changes which should affect what the schemes will have to do to keep their QROPS standing from 6th April 2012. It is looking highly likely that New Zealand should be the number 1 choice for thousands of UK pension holders that switch their UK pension into one each year.

I highly recommend speaking to a UK qualified financial advisor as it is such a complex area you'd need to grasp fully all the advantages and or implications any decision would have both now and into the future.




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