A QROPS is a pension scheme that must be established outside the UK. It must meet other requirements, including the requirements of pension schemes in the country in which it is established. It must also be recognised for tax purposes as a pension scheme there.
Additionally the scheme must be established in a prescribed country or territory or it must meet further requirements. The prescribed countries are a country within the European Economic Area or a country (except New Zealand) with which the UK has a double taxation treaty containing provisions about exchange of information and non-discrimination. The further requirements are that the pension scheme is a New Zealand KiwiSaver or that the scheme manager designates 70% of the sums transferred from a UK registered pension scheme to be used to provide the member with an income for life and all pension benefits paid no earlier than they would be under pension rule 1 (the normal minimum pension age of 55, unless the ill-health condition is met).
These rules are set out in the Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006, as amended by the Registered Pension Schemes and Overseas Pension Schemes (Miscellaneous Amendments) Regulations 2012.
To receive transfers of UK pension savings free of UK tax, the scheme manager of a QROPS has to notify Her Majesty's Revenue and Customs (HMRC) that the scheme meets the conditions to be a QROPS and undertake to comply with any information requirements, including informing HMRC if the scheme no longer meets the conditions to be a QROPS as provided for in section 169 of Finance Act 2004.
Additionally the scheme must be established in a prescribed country or territory or it must meet further requirements. The prescribed countries are a country within the European Economic Area or a country (except New Zealand) with which the UK has a double taxation treaty containing provisions about exchange of information and non-discrimination. The further requirements are that the pension scheme is a New Zealand KiwiSaver or that the scheme manager designates 70% of the sums transferred from a UK registered pension scheme to be used to provide the member with an income for life and all pension benefits paid no earlier than they would be under pension rule 1 (the normal minimum pension age of 55, unless the ill-health condition is met).
These rules are set out in the Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006, as amended by the Registered Pension Schemes and Overseas Pension Schemes (Miscellaneous Amendments) Regulations 2012.
To receive transfers of UK pension savings free of UK tax, the scheme manager of a QROPS has to notify Her Majesty's Revenue and Customs (HMRC) that the scheme meets the conditions to be a QROPS and undertake to comply with any information requirements, including informing HMRC if the scheme no longer meets the conditions to be a QROPS as provided for in section 169 of Finance Act 2004.
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A QROPS, essential for those moving their UK pension scheme abroad, demands adherence to specific criteria. It necessitates establishment outside the UK, meeting local pension scheme standards and tax recognition. Requirements involve selection from prescribed countries or meeting additional criteria like New Zealand's KiwiSaver or designating funds for a lifetime income. Stringent rules outlined in the Pension Schemes Regulations 2006 (amended in 2012) govern these transfers, emphasizing compliance with HMRC conditions for tax-free UK pension transfers. QROPS offers an avenue for international pension management, subject to meticulous regulatory obligations. Here find more information on 3rd pillar pension.
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