Being a UK citizen, you might get depressed by the weather forecast. We fully understand that. You often think back to those French Riviera summers that lasted forever. Well, not really forever, otherwise you would be here, on the Cote d’Azur and not in the UK.
If you’re planning on retiring in the South of France, we can help with our UK partner to discuss the various financial issues that you might face. For instance, if you’re not sure about the type of pension benefits that you’ll receive, it’s important that you speak with a qualified professional. They can review your situation and provide advice based on their expertise.
UK resident? QROPS might be the best way to retire in France
When you are ready cross the channel and leave the grey rain behind you, our team is ready to answer the following questions:
• Should I take the Pension Commencement Lump Sum (PCLS) available?
• Do I buy an annuity or enter into a drawdown contract?
• What are the options, such as phased retirement, that are available?
What are QROPS?
A QROPS is a type of pension transfer scheme that’s recognised by the UK’s HM Revenue & Customs (HMRC). It’s designed to meet the standards of a UK pension. The word QROPS sounds like a secret James Bond mission tool, but it stands for Qualifying Recognised Overseas Pension Schemes. You can easily transfer a UK pension into an overseas scheme if it’s registered with an organization that’s approved by the UK’s tax authority.
Do you qualify for QROPS?
QROPS are a great pension option for people who have a UK pension but are not currently residing in the country or plan on leaving. You must get professional advice to ensure that you do not break the rules. Our UK partner has a team of financial professionals that can help you establish and manage your QROPS retirement plan. Once you have this in place, you can start finding a property on the French Riviera. Wouldn’t that be nice?
Why should I choose a QROPS?
Setting up a QROPS is one of the best ways to benefit from your pension fund’s investment potential. It allows you to control where your funds are invested, consolidate multiple pension plans into one, and avoid buying into an automatic retirement income. Additionally, the remaining funds are tax-free once they are distributed to your beneficiaries.
What are the pension key benefits of a QROPS?
• No need to buy an annuity
• Funds passed to beneficiaries in full after death: after completing 5 full tax years of non UK Tax residency, your pension will no longer be
liable to UK income tax or death charges of up to 45%
• Your pension can be paid in a flexible choice of currency
• Up to 30% pension commencement lump sum.
• Secure jurisdictions
• Investment flexibility
• Transparent charges
• Greater investment freedom
• Succession planning
• Pensions can be consolidated into one
• Free from UK lump sum death benefit charge
• Some jurisdiction allow your pension income to be paid gross
Becoming a resident of France, which is the best QROPS jurisdiction?
The Finance Act of 2012, which established QROPS jurisdiction in France, made Malta the preferred choice for residents. Malta is a member of the European Union and has a very transparent and sophisticated tax system that makes it ideal as a QROPS jurisdiction.
Please note if you become resident outside of the EEA within 5 years of the transfer to a EU QROPS, there is likely to be a retrospective tax charge.
Is it possible to transfer my UK pension to QROPS after Brexit?
There were worries that the country would impose a 25% fee on transfers within the EU. The UK’s 2021 budget did not contain any changes to QROPS regulations. There are currently no plans to change the regulations following the country’s exit from the European Union. This means that if you are transferring your pension to France, and you are a resident of the EU for at least five years, you will not be subjected to the 25% tax. It is also important to note that the UK has exited the EU, so it is no longer obligated to follow the EU’s freedom of capital movement rules.
Advantages of transferring your UK pension into a QROPS fund
When you transfer your pension to an EU-based euro fund, you will no longer have to deal with fluctuations in the exchange rate or fees.
An EU pension fund allows you to take advantage of the tax advantages of investing in other countries. It also provides estate planning flexibility.
You can reduce or even remove all of your tax liability at death.
You can also withdraw up to 30% of your accumulated lump sum.
Potential risks
Withdrawals of up to 30% in France will still be subject to local taxes. An option would be to take a 25% tax-free lump sum while still residing in the UK.
Depending on your personal situation, French taxes on social charges and pension income can be high.
All together, enough reasons to get in contact with our QROPS specialists.
I am relocating!
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