QROPS and taxes
Income from UK pension arrangements is subject to UK Income Tax. It is collected as a withholding tax, which from April 2008 has been at 20%. This tax is applied to everyone in receipt of UK pension income whether or not they live in the UK and with no exemption for foreign nationals.
Transferring UK pension rights to a QROPS scheme means that UK Income Tax on pension income can be legitimately avoided.
UK pension rights that are transferred to a QROPS can also escape UK Inheritance Tax net as well as the other charges that apply to UK pensions.
Spouses who are not UK domiciled do not enjoy the benefit of exemption from UK Inheritance tax on the death of their UK domiciled spouse.
QROPS can ensure that expats with a spouse or civil partner who is not UK domiciled, do not suffer this form of death tax discrimination.
For more information please email us.