Can I transfer a ROPS/QROPS back to the UK?
I have been living in Spain for 13 years and was planning to retire here, however my plans have changed and I will soon be relocating back to the UK to live and then retire. I originally started my QROPS in 2010 and have been paying into it ever since, but due to recent health issues with my mother, I will be returning to the UK within the next few months to care for her. Can I transfer my pension back to the UK without suffering too many consequences?
A Recognised Overseas Pension Schemes, or 'ROPS' (formerly QROPS), can be transferred back to the UK.
The central thing to be aware of here is the tax liability that comes with staying in the UK if you begin to drawdown money from an offshore based ROPS.
To clarify, you will be liable for taxation on the following, provided that you are a UK resident during either the tax year of the payment, during the previous five tax years, or if the payment was made on an investment in taxable property;
- Smaller lump-sum payments
- Serious-ill health lump sums paid to members 75 years and over
- Any unauthorised payments
- Certain lump sums that are paid following death of a member
Another option for someone who’s plans have significantly changed, is to repatriate your current ROPS to a UK scheme, such as a Self-Invested Personal Pension (SIPP). This is potentially a great option for expats both returning to the UK, or that have invested in an offshore pension scheme. Transferring to a SIPP within the UK (from a ROPS) will allow you to reap many benefits.
Not only will it make it much easier to withdraw and manage your cash in the future but will also avoid you having to follow any legal changes or future legislation in the ROPS scheme. It is also worth noting that a SIPP’s annual running cost is typically lower than a ROPS (however this is dependent on the size of the fund in question).
It's vitally important that you check and confirm any early exit penalties or tie in periods before you make any decisions as these could end up being costly.
If you have already moved back to the UK, or circumstances have caused you to stay and you are unsure on what you should do regarding your ROPS pension, we can connect you with one of our pension experts. This is to make sure that you are planning correctly, to provide a steady comfortable income for your retirement and to provide you with the reassurance you need for your future.
Remember, you must always seek financial advice before you make any decisions about your pensions, including whether to transfer your ROPS into the UK to ensure you are making the best decision you can.
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