Qrops Pensions France
The British love-hate relationship with our French neighbours across the channel seems to continue, however France is still the place that many ex-pats emigrate to.
A record 388,000 Britons left the UK permanently to live abroad in the year ending March 2009, many of them choosing to settle in France.
According to statistics in Britain, at least 10,000 ex-pats have resided in France for two years or more.
The lifestyle and warmer climate may have contributed towards this choice but few ex-pats will have considered France as a tax haven for their UK pensions.
In many ways the French tax and pension systems are just as complicated as those in the UK, but anyone living in France permanently who has UK pension rights can transfer into a QROPS offshore pension and gain all the benefits that come with the move.
Transferring into a French QROPS is nearly impossible because no providers are set up to receive UK pensions. An ex-pat’s UK pension can be opened in any of the forty or so countries which are authorised to operate a QROPS scheme.
The Benefits Of A QROPS When Retiring To France
This means the fund can sit and grow in a low tax environment no matter where the scheme member lives and that includes France.
QROPS providers pay pension benefits in any major currency which includes the Euro, this relieves the erosion of pension spending power by exchange rate fluctuation and does away with expensive bank charges for switching cash between the United Kingdom and France.
Pensions are paid gross and income tax is paid where the ex-pat is resident, so obviously this is subject to French tax rules.
Although the QROPS doesn’t have to be French based and be involved in a trust, the funds sit outside of a complicated French inheritance regime.
This is a double bonus for ex-pats as not only do they avoid buying an annuity or alternatively secure pension (ASP) which they would have to invest in if the pension remained UK based, but they also get to pass on any remaining funds to their family when they die.
Advice Regarding When To Take Out A QROPS
Timing is very important when taking out a QROPS. Anyone approaching their seventy fifth birthday who has not yet bought an annuity, should speak to an independent financial firm to see if they can avoid buying an annuity or ASP and make a QROPS transfer instead.
For anyone who has bought an annuity or ASP it’s maybe too late to switch to a QROPS without facing financial penalties. Why don’t you contact us to find out more details?
Anyone else who has not begun drawing their pension should be able to make a tax effective transfer and subsequently receive all the benefits of an offshore pension whilst living in France.
For more information, visit the HMRC website here.