QROPS in the Netherlands: QROPS are increasingly becoming the pension planning vehicle of choice for British expatriates. 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 allow British expatriates, or foreign nationals who have worked in Britain for a period, to transfer their UK pensions overseas. Pensions that can be transferred include personal and occupational pension schemes.
Who is eligible for a QROPS pension transfer?
To transfer your pension out of the UK, you must have already left the country for tax purposes or intend to leave soon. Once a tax resident in the Netherlands, you can transfer your pension fund from the UK into a QROPS as 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
The schemes offer a certain degree of flexibility regarding how and when you can take benefits. These include:
- A lifetime income can be provided by way of income drawdown.
- In most cases, you can also draw down a higher annual pension income than you would if you were to retire in the UK.
- The scheme helps solve the currency risk problem by allowing you to invest your pension and take income and benefits in a currency of your choice.
- The vehicle offers greater investment options, allowing you to access funds managed by any of the world’s leading investment groups.
- Assets held in the scheme fall outside your estate for Inheritance Tax purposes if you die while living overseas. This means your wealth is protected for future generations.
Tax note: You should note that although you can take up to 25% of your pension fund tax-free on retirement in the UK, the Netherlands will tax all distributions as income
For further information, please download our free QROPS Guide