The QROPS France section looks at the treatment of UK pensions when transferred overseas by French residents. Firstly, let’s define what a QROPS is. Qualified Recognised Overseas Pension Schemes enable British expatriates or foreign nationals who have worked in Britain to transfer their UK pensions overseas. A QROPS must be recognised by HMRC and meet UK tax legislation requirements.
QROPS France
A QROPS in France is an effective and efficient retirement solution that can provide flexible arrangements for your finances. It is essential to understand as much as possible about the processes involved before undertaking a QROPS pension transfer in France. The following are useful topics to help give you a clear insight:
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A Qualifying Recognised Overseas Pension Scheme (QROPS) is a vehicle that facilitates the transfer of existing UK pensions. Wherever your retirement destination is, it is best to arrange your finances in the most flexible manner possible. The objective is to access your capital when you want, where you want, and in the currency of your choice.
QROPS France: what you need to know
A Qualifying Recognised Overseas Pension Scheme (QROPS) is a vehicle that facilitates the transfer of existing UK pensions. Wherever your retirement destination is, it is best to arrange your finances in the most flexible manner possible. The objective is to access your capital when you want, where you want, and in the currency of your choice.
It is essential to clearly understand pension legislation in your chosen country of retirement. After that, you need to select an appropriate product that allows you to benefit from both a tax and investment perspective.
Expatriates in France can avoid the various restrictions imposed by the UK Government when taking retirement benefits. Existing UK pension legislation allows Expats to transfer their pensions to a Recognised Overseas Pension Scheme.
Key points for QROPS pension transfers to France
What you need to know
QROPS is a vehicle that facilitates the transfer of existing UK pensions.
Benefits
QROPS offer a certain degree of flexibility when accessing benefits. The scheme features affect your retirement planning in different ways
Rules & Regulations
As in every process, there are rules and regulations to ensure that a transfer to a QROPS functions correctly.
Eligible for a pension transfer
If you wish to transfer your pension from the UK, you must have already left the country for tax purposes or intend to leave shortly.
Legitimate scheme
A list of Recognised Overseas Pension Schemes (ROPS) is on the HMRC website.
Suitable jurisdictions
As in every process, there are rules and regulations to ensure that a transfer to a QROPS functions correctly.
QROPS Rules and Regulations:
What makes a scheme a QROPS?
An HMRC-recognised pension scheme that allows British expatriates or foreign nationals who have worked in Britain for some time to transfer their UK pensions overseas. The pension scheme must meet requirements set by UK tax law and mirror that of regulated pension schemes in the UK.
Rules and Regulations:
As in every process, there are rules and regulations to ensure that a transfer to a QROPS functions correctly. The QROPS rules set by HMRC are consistent with UK rules. It is necessary to abide by these rules for the overseas pension scheme to be accepted by HMRC. The criteria outlined by HMRC for a foreign pension to qualify as a QROPS include the following:
- The pension scheme must be an overseas pension scheme
- It must register with the country’s tax authority as a pension scheme
- The local pension scheme state regulator should oversee the administration of the scheme
Removal of PERPS as French QROPS
In 2016, HMRC removed all French PERPS (Plan d’Epargne Retraite Populaire) from the approved Recognised Overseas Pension Schemes list. This is because HMRC decided that they did not meet their requirements.
Current UK legislation allows scheme members to have access to their pension fund after the age of 55. In France, the statutory retirement age is 62 years. However, early withdrawals from pensions before the retirement age are possible in exceptional circumstances:
- Illness
- Death of the spouse
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- Over-indebtedness
- The end of unemployment benefits
QROPS France: Who is eligible for pension transfer?
QROPS list: Where are the schemes established?
A list of Recognised Overseas Pension Schemes (ROPS) is on theHMRC website. It consists of pension schemes that have informed HMRC that they meet the conditions to be aROPS. European-based Expats seeking to move their UK pensions overseas are encouraged to seek out EU jurisdictions for their schemes where a double-taxation agreement (DTA) framework exists.
How do I know if it is a legitimate scheme?
For a scheme to qualify as a QROPS, it must first be a Recognised Overseas Pension Scheme (ROPS). It must also provide benefits regarding retirement, ill health, death or similar circumstances. If it meets these requirements, the scheme must take certain additional steps to qualify as a QROPS as defined by the legislation.
Not all pension transfers to overseas schemes qualify as QROPS transfers. Verifying that the QROPS receiving your UK benefits is on the HMRC list is necessary. HMRC will treat a pension transfer to a scheme not on the ROPS list as a transfer to a non-qualifying overseas scheme and may impose substantial penalties.
This list consists of pension schemes that have informed HMRC that they meet the conditions to qualify as a ROPS. It is important to note that QROPS providers self-certify the list; HMRC doesn’t have an official approval system for ROPS. It is, therefore, the responsibility of the individual to find out if there is tax to pay on any transfer.
The updated list of ROPS notifications
The ‘Pension Schemes Services’ department usually updates the list twice a month. A QROPS will be removed from the list if it no longer qualifies for recognition. If there are concerns about its status, HMRC may suspend the scheme and conduct further background checks.
As mentioned previously, there can be certain disadvantages in transferring to a QROPS, including the potential deregulation of the scheme. The UK Pension administrator will delist a scheme if it finds insufficient pension regulation in a given jurisdiction. They are not obligated to make public their reasons for delisting a particular scheme. Members concerned about removing their QROPS from the published list should approach their scheme manager.
QROPS France: Which jurisdictions are suitable
There are numerous territories which qualify as being suitable for the hosting of overseas pension schemes. It is important, however, to weigh up the pros and cons of each jurisdiction.
Malta is a favoured QROPS jurisdiction in the European market
Since 2009 Malta has established itself as the primary jurisdiction for QROPS providers. The local Maltese regulators work with HMRC to ensure compliance with rules and procedures. Malta has the advantage of offering EU country-based schemes to the marketplace.
British Expats retiring to Europe should consider Malta the jurisdiction of choice for transferring their UK pension. This is because Malta has an existing double-taxation agreement (DTA) framework. This framework consists of agreements with 59 other countries, including the UK, and renowned EU retirement destinations, such as France.
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