QROPS in the Netherlands are increasingly becoming the pension planning vehicle of choice for British expats. Expats who benefit from the 30% ruling in the Netherlands can now also take advantage of the tax incentives of using QROPS in terms of their retirement planning.
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There are an estimated 48,000 British expatriates currently residing in Holland. The Netherlands may be famous for its windmills and tulips; however, it is also a hub of business with international organizations such as Shell, EPO, the ICC and ESTEC located there. As such it is considered an ideal place for expats in terms of both work and retirement.
Make the most of your UK pension by using a QROPS when retiring to the Netherlands
Recent changes to UK pension legislation mean that expatriates in the Netherlands may be able to avoid the various restrictions imposed by the UK Government on how pension benefits can be taken on retirement, by transferring their pensions to an overseas pension scheme. Pensions that can be transferred include personal and occupational pension schemes.
Who is eligible for a QROPS pension transfer?
In order to transfer your pension out of the UK, you must have already left the country for tax purposes, or be intending to leave in the near future. Once tax resident in the Netherlands, you can transfer your pension fund out of the UK into a QROPS in the same way that you would transfer between pension providers within the UK. Those eligible for an overseas pension transfer therefore include:
- A UK national moving to the Netherlands
- Any national who has built up UK pension benefits and is now resident or intending to become resident in the Netherlands
QROPS Benefits
The schemes offer a certain degree of flexibility in terms of how and when you can take benefits. These include:
- You can take up to 30% of your pension fund tax-free on retirement. This is higher than the current UK limit.
- A lifetime income can be provided by way of income drawdown, a fixed annuity, or a combination of both
- In most cases, you are also able to draw-down a higher annual pension income than you would if you were to retire in the UK.
- The scheme helps solve the problem of currency risk by allowing you to invest your pension and take income and benefits in a currency of your choice.
- The vehicle offers a greater choice of investment options, allowing you to access funds managed by any of the world’s leading investment groups.
- Assets held in the scheme fall outside of your estate for Inheritance Tax purposes if you die while living overseas. This means your wealth is protected for future generations, which is in stark contrast to the potential 55% tax charge on death were you to leave your pensions in the UK.
For further information please download our free QROPS Guide
