EURBS – The New QROPS?
The EURBS (European Union Retirement Benefit Scheme) was introduced to assist EU residents to consolidate their pension provision from different countries into one pension scheme. They are in very simple terms an EU version of a QROPS.
An EURBS is a scheme that allows a person who has accumulated pension schemes in different EU countries to consolidate them into a single pension. This single plan allows the holder to receive pension income from a single source rather than receiving a series of smaller payments from different pension providers in different countries.
If you have deferred pension provision France and/or Germany in addition to your UK pension scheme it is probable that only your UK pension can be transferred to a EURBS or QROPS due the nature of the existing schemes in both countries. You will therefore need to obtain advice from an experienced adviser. We can arrange for an adviser to contact you when you give us your details.
A further advantage to holding an EURBS is that it is possible to hold one in a jurisdiction where tax rates are low. The most common location is Malta where you can receive your income and only pay 15% tax. There are Double Taxation treaties in place between Malta and all the member countries of the EU, so there is potentially considerable savings in income taxes.
One major difference between an EURBS and a QROPS is that the EURBS can only be located country that is a member of the EU. This means that it is not possible to have an EURBS located in say New Zealand whereas a QROPS can be located there.
An EURBS itself can be a QROPS because its rules satisfy the HMRC standards for it to be recognised as one. However it is not easy to find out which (if any) of the QROPS listed on the HMRC website are also EURBS.
For a UK pension to be transferred to EURBS it must be follow the same principles as a QROPS:-
- The EURBS must be regulated as pension scheme and be recognised as a pension scheme for tax purposes in the jurisdiction it located
- The EURBS must be open to residents of that jurisdiction
- You must be resident (or plan to move in the following 12 months) outside the UK to take out a EURBS
- At least 70% of the EURBS fund must be used to provide pension income
- Benefits cannot be withdrawn (in most cases) before the age of 55 has been achieved
- The EURBS undertakes to follow the reporting rules.
The main difference in the rules is that EURBS must be based in EU and if it is not QROPS it must obtain approach HMRC for approval of the transfer before the EURBS approaches the relevant UK pension scheme(s) for the transfer.
To find out which is the better option for you, you need to seek advice from a specialist adviser. We can arrange for an adviser to contact you when you give us your details.
For more information, visit the HMRC website here.