What Happens to QROPS After Brexit? QROPS for UK Residents Post-Brexit Explained
QROPS is one of the personal pension scheme that meets the qualifications of the HMRC where you can transfer your UK pension schemes such as Final Salary and Defined Contribution pension to the qualifying country. As a personal pension scheme, QROPS offers a wealth of benefits that you can have compared to your workplace UK pension scheme.
QROPS for UK residents was enforced by the UK government to allow freedom of capital movement in certain areas that is approved by the HMRC. If you want to learn QROPS more, we have a dedicated page for QROPS here. There are questions regarding QROPS after Brexit, one of the most asked questions is “What happens to QROPS after Brexit?”.
In this article, we will answer the question above and all you need to understand regarding QROPS for UK residents post-Brexit, as well as reasons why you should consider getting and advice to transfer your pension to QROPS. Before we dive deeper into the discussion, our CEO, and Independent Financial Advisor, Dominic James Murray, gave his insights in one of our YouTube videos below regarding the QROPS for UK residents post-Brexit era.
Can a UK Resident Have a QROPS?
UK resident living outside the UK or retiring abroad can have a QROPS that satisfy the HMRC’s qualification. If a UK resident is advised by FCA-regulated IFA to transfer to QROPS, they then have to apply to the HMRC before they can transfer their UK pension scheme to QROPS. The list of QROPS HMRC are updated from time to time.
You should check yourself whether the country you are planning to residing in are included in the HMRC QROPS list, or you can ask your IFA about this.
QROPS for UK Residents Post-Brexit
There are many benefits of transferring your Final Salary or workplace pension schemes to QROPS. You can have tax benefits, have options to types of investments and funds, avoid LTA charge, and many others. However, even with all those benefits, UK residents still could not utilize QROPS due to the fact that there are no specific regulations from the UK government that regulates QROPS for UK residents.
However, questions regarding QROPS arise as the UK decide to do withdrawal from the European Union. What happens to QROPS after Brexit? Will things get more complicated or less complicated? Fortunately, the answer is, Brexit has made QROPS for UK residents less complicated.
There have been some questions about what will happen after the UK leaves the EEA. Currently, the law says that there is no Overseas Transaction Charge (OTC) if both the member and the pension are in an EEA country. The UK is still considered to be a member of the EEA until December 31, 2020. What will happen, though, on January 1, 2021?
This is one small part of Brexit that seems to have been taken care of. Regulations have been implemented that will change the law so that as of January 1, 2021, the charge will not apply if the member lives in the UK or in an EEA country and the QROPS is set up in an EEA country, including Gibraltar.
As such, QROPS for UK residents is made possible by the UK government thanks to Brexit. If you are confused about what the OTC is, click here to learn more.
How Long Will QROPS Be Available for the UK Residents?
Now we all know that QROPS for UK residents is viable, the question is: How long will QROPS be available for the UK residents? There is no certain answer on this because the UK government can change the regulations at any time.
This is why, if you are planning to utilize QROPS to gain more tax benefits to your finance, then you should consider seeking advice from an FCA regulated IFA as soon as possible, before the regulations are changing. A consultation with your IFA can provide you with a clear view of what are the proper things to do with your Final Salary Pension.
QROPS for UK Residents: Get the Best Financial Advice From Cameron James’ IFA
We have been around in the UK Pension Industry for more than ten years, serving clients around the world as well as UK residents who are looking to transfer their Final Salary Pension to QROPS.
Our experienced IFA will be able to help you with QROPS for UK residents matter and give the advice that is tailored to your situation and financial needs. Hit the button below for your free initial consultation with one of our FCA-registered, Independent Financial Advisor.