Qrops Pensions New Zealand
New Zealand is a long way from the UK however there are still around 30,000 British ex-pats a year who decide to relocate to the islands and make them their home.
Any ex-pat who has contributed to a UK pension can if they wish transfer their funds into a QROPS. In New Zealand pension fund growth is taxed while other benefits are not taxed at all.
PLEASE NOTE: Due to the Draft Finance Bill 2012 the New Zealand loophole no longer exists. You will only be able to do a QROPS if you live and are resident in NZ.
Unfortunately, these dreams have been put on hold by new regulations proposed by Her Majesty’s Revenue and Customs (HMRC) department that will tighten the QROPS market.
The QROPS regime was intended to allow UK emigrants to shift their pensions to complying offshore providers on the assumption they would have access to their (tax-advantaged) retirement funds under similar terms as they would have had at home.
However, some jurisdictions interpreted the QROPS rules rather loosely, using the scheme as a ruse for UK residents to collect their tax-free pensions early.
It’s worth noting however that some UK pension transfers into a New Zealand scheme may not enjoy full tax exemption.
It’s extremely important to acquire up-to-date advice as tax rules between the United Kingdom and New Zealand are subject to change at short notice. With this in mind it can definitely affect an investment decision about moving your pension into a New Zealand QROPS.
New Zealand QROPS Could Pay Out Enhanced Tax Free Lump Sums
The majority of UK pension schemes can be transferred into a New Zealand QROPS. This does exclude the state pension or any funds where the saver has already bought an annuity.
New Zealand QROPS does fall within HM Revenue and Customs rules as the New Zealand government actuary has confirmed to providers that HMRC has written to accept Kiwi Saver and superannuation schemes so that they all meet QROPS compliances. As an additional bonus some New Zealand QROPS also pays out more than 25% of a tax free lump sum, although this does happen under strict rules and has to meet certain criteria.
The Need For Qualified Advice
Like so many other QROPS, New Zealand plans are good for some QROPS transfers while not so good for others. It’s therefore essential to seek competent advice from a regulated and qualified financial company that has experience in dealing with New Zealand QROPS transfers.
The complex nature of New Zealand QROPS may mean an inexperienced adviser could miss key points that may prove to be costly for you in the future.