QROPS for Indian Residents – an Introduction
If you have a UK pension, and are now living permanently in India, then there are several potential benefits of transferring those pension rights into a QROP (Qualifying Recognised Overseas Pension). A QROPS can be an excellent option for people who have left the UK and are now permanently living in India, and can offer advantages such as increased flexibility, lower taxation, enhanced lump sum benefits and the ability to pass on your pension to your loved ones after your death.
What are QROPS?
QROPS were conceived in 2006 during an overhaul of UK pension legislation, aimed at simplifying the transfer of a UK pension into another country and has enabled UK pension holders who are, or who will shortly become non-resident of the UK to transfer their pension out of the UK and into a QROPS scheme based in another country.
Benefits of a QROP Pension
By transferring your UK pension into a QROPS scheme, there are a number of benefits available for Indian residents:
- Flexible drawdown of your pension – access 100% of your pension at the age of 55. (Malta QROPS only)
- No requirement to buy an annuity. (Malta QROPS only)
- Pension can be paid in the currency of your choice. (Malta QROPS only)
- Greater investment freedom, and flexibility to invest in a wider range of funds and investments. (Malta QROPS only)
- The ability to pass on pension funds to your beneficiaries on your death. (Malta QROPS only)
- Ease of administration – you can consolidate all your UK pensions in a single QROPS.
- Enhanced tax benefits.
- Avoid up to 45% UK death taxes.
It should be noted that the exact benefits and advantages of transferring your UK pension into a QROPS scheme will vary from individual to individual, and you should speak to a professional QROPS adviser who will be able to walk you through the benefits of a QROPS transfer.
In particular, many of the advantages of transferring a UK pension into a QROPS scheme as outlined above, only apply to transfers to Malta QROPS schemes, and not local Indian QROPS schemes. For more information about the benefits of transferring your UK pension into a scheme in Malta, please read our article on Malta QROPS schemes for residents of India.
Who is Eligible for a QROPS Transfer?
In order to be able to transfer your UK pension into a QROPS scheme in another country, you must be between the ages of 18 and 75, and have either left the UK permanently, or be intending to do so in the current tax year.
There are no restrictions in terms of the minimum amount of pension funds required to establish a QROPS, although in practice, a minimum pension pot of £40,000 is required due to the nature of the fees and expenses involved.
For more information about transferring your UK pension into an overseas QROPS scheme, please contact us.