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You are here: Home / QROPS France / Who is not eligible for QROPS?

Who is not eligible for QROPS?

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By Des Cooney

When considering an overseas pension transfer, it is important to note that not all pension funds are eligible to be treated as Qualifying Recognized Overseas Pension Schemes (QROPS).  Indeed, there are circumstances when retiring to countries such as Spain, Portugal and France that a QROPS pension transfer is not a viable option.

Certain UK pension funds are not eligible for transfer to a QROPS.

Who is not eligible for QROPS?

UK pension funds that are not eligible for transfer include:

  • Any pension which has previously been used to purchase an annuity. However,  if you have already taken a lump-sum payment form you pension pot, but not purchased a lifetime annuity, you may still qualify for a QROPS.
  • Any pension that has already taken payment from a ‘final salary scheme’.
  • UK State pensions.

It should be noted that being in possession of a QROPS will not affect your entitlement to a UK state pension.

When not to use QROPS?

Transfers may not be permissible into an overseas pension scheme even though it has been recognised as having QROPS status by HMRC  for UK tax purposes. Eligibility for transfer into a QROPS also depends on the scheme being able to accept a transfer under the legislation of the country in which it is established. In the case of the US, transfers to ‘qualified’ retirement plans, including individual retirement arrangements (IRAs), cannot be made as such plans are not permitted to accept a transfer of funds from a UK registered pension scheme. *

For those who do not qualify for a QROPS pension transfer, there are other options available, depending on the size of your pension, the country you wish . to retire in, and your tax and domicile status. The Self Invested Pension Plan  (SIPP) is one of the more common investment alternatives for those who cannot take advantage of a QROPS.

Who qualifies for a QROPS pension transfer?

  • Must be between the ages of 18 and 75 years.
  • Have been living outside the UK for 5 consecutive fiscal years.
  • British nationals who live abroad, or individuals who have previously worked in the UK, and are in possession of UK personal or corporate pension plans
  • Have a pension fund in excess of £30,000 for this type of arrangement to be cost-effective. A number of providers will allow individuals top-up their fund in order to meet minimum transfer value requirements.

Applicants for a QROPS need to provide evidence that they have left the UK or are planning to do so within the next 12 months . This can take the form of a lease on a property or a formal offer of employment.

What UK pensions can be considered for QROPS?

The following recognised pensions can be transferred:

  • Personal Pensions
  • Final Salary Pensions
  • Money Purchase Schemes
  • Civil Service and Armed Forces

Guaranteed Minimum Pension (GMP) and protected rights can be transferred to a QROPS providing the member consents in writing and acknowledges that the transfer is made at their own risk

How popular are these schemes today?

After an initial slow start, these schemes have exploded in popularity. With the market for QROPS now in its eighth year, UK expats and workers with UK pensions can choose from over 900 available schemes. Latest figures show that more than 10,000 UK pension funds are being transferred into such schemes each year.

Download our free QROPS Guide

**Please note that it is important to speak with a professional financial adviser who will review your personal situation and determine if a QROPS pension transfer is appropriate for you.

QROPS Demystified

https://axis-finance.com/wp-content/uploads/2017/12/Qropsdemystified.mp4
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Download the free QROPS Guide

All of our Pension Guides are designed to help you make the right decisions for your retirement. We are available for a free consultation if you need further advice.

 

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About AXIS

AXIS Financial Consultants are a team of Overseas Pensions experts helping expats make the best financial decisions about their retirement.

Important notice

The contents of this website are for educational and information purposes only. No part of this website is to be considered as an offer, inducement or recommendation to invest.

AXIS Financial Consultants are a fully authorised “Courtier d’Assurance” in France, ORIAS reg. no. 17 003 701

They are also authorised to act as a “Financial Investment Advisor “, referenced under the number E009199 by the association ANACOFI-CIF and approved by the Financial Markets Authority in France.

Registered address:
374 Avenue de la Gaule,  Ile de la Dérivation
78955 Carrieres Sous Poissy, France
Tel: 00 33 1 39 70 98 54

Co. reg: R.C.S. Versailles 824 686 968

 

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