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    Specialist Help For USA Residents

    It is estimate that there are over 1.5 million British expats now living in the USA. A very large proportion of this number will never return to the UK. Choosing to live out their twilight years in sunnier climes.

     

     

    The USA is certainly a favourite destination for many UK ex-pats, however transferring a pension into QROPS is problematic for stateside residents as well as ex-pats.

    For the first time some QROPS is now available that tackles the necessary legal and administrative issues that have prevented US residents and nationals from picking up the tax and investment benefits or transferring to a QROPS.

    QROPS advisers do confirm that the HM Revenue and Customs listings of QROPS have included several US 401(k) pension schemes more or less from day one of April 2006. In principle QROPS transfers were available to US nationals living abroad along with UK ex-pats moving to the United States.

    It does remain that the HMRC’s counterpart in the USA namely the Inland Revenue Service (IRS) has so far refused to recognise QROPS transfers into a QROPS USA 401(k) pension by UK ex-pats living there. The reason for this they claim is that the QROPS structure is not legal.

    A similar no-go status was imposed on US nationals overseas who transferred from a 401(k) to a QROPS.

    QROPS 401(k) And IRA Transfers

    Both triggered IRS tax penalties on any funds that were transferred.

    This unfortunately is likely to tighten up further from January 2013 when the Foreign Account Tax Compliant Act comes into force. The Act will virtually bar all US residents and US nationals living outside the country from transferring their pensions into a QROPS.

    Although this complicates any QROPS transfers in or out of a 401(k) pension some providers have managed to re-structure the master trust that manages a QROPS into a USA-friendly legal entity.

    This is a legal alternative that opens QROPS USA investments as a two-way street between transferring from a UK pension to a US QROPS and likewise from a US 401(k) to an offshore QROPS.

    The framework is now in place, however QROPS USA is still tied up in red tape and successful transfers do require patience, specialist skills and expertise.

    The possibility of moving QROPS pension transfers for UK ex-pats living in the US does open a new world of investment opportunities that were once unavailable.

QROPS Providers

What Is A QROPS Provider?

A QROPS provider is a company that operates QROPS. It could be a world wide insurance company (e.g. AXA) or it could be a specialist company in the country that the QROPS is based (e.g. Lifeyrissjodur in Iceland).

How Do I Know If A Company Is Recognised As A QROPS Provider By HMRC?

Every month HMRC publishes a list of the QROPS that it recognises. Not all QROPS providers are listed because they wish to remain private. The HMRC list can be found here. Not all QROPS are listed as some have chosen not to have their details published. In this situation you should ask to see a copy of the confirmation letter from HMRC.

Can A QROPS Provider Stop Being Recognised By HMRC?

Yes, if HMRC believes that a QROPS is being misused, it can withdraw approval, and a QROPS provider can voluntarily cease to be recognised. This can happen for a number of reasons and if it does you can face a significant tax charge levied by HMRC.

An adviser should not recommend a QROPS provider that is likely to have their QROPS provider status withdrawn.

What Happens If A QROPS Provider Gets Into Financial Difficulties?

All QROPS providers should set the plan up as a trust so that the plan’s assets are held separately from the company’s assets. You should be able to continue to receive an income from the plan and you can transfer it to another QROPS provider if necessary.

Can A QROPS Specialist Be A QROPS Provider?

Yes, some groups of companies have both QROPS advisers and QROPS providers. Usually they are separate corporate entities and the advisers will recommend the sister company’s plans.

We can arrange for an adviser to contact you when you give us your details in the box to the side of this page. Any adviser that we recommend will usually be independent and not promote just one company’s QROPS.

The information given in this article is strictly for information purposes only and is not to be construed as financial advice.

New Provider List Feb 2018

Within the last month, the QROPS pension market by 35 new pension schemes located offshore for expats.

This means there are now 1201 QROPS pensions for expats t choose from offered by a total of 28 financial entities. A year ago these numbers were higher; 1264 pensions were listed from 40 financial centres.

The table shows the current number of schemes in 2018, featuring the new listings and removals since the 2017 list.

Financial JurisdictionNumber of QROPS
Australia554
Austria5
Barbados1
Belgium1
Bulgaria3
EU Institution1
Finland1
Germany12
Gibraltar41
Guernsey43
Hungary2
India13
Ireland61
Isle of Man320
Jersey39
Kenya2
Latvia3
Liechtenstein2
Luxembourg2
Malta36
Mauritius2
Netherlands17
New Zealand31
Norway1
South Africa3
Sweden2
Switzerland2
USA1

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