Transfer UK Pensions with QROPS New Zealand

Transfer UK Pensions with QROPS New Zealand

QROPS New Zealand or Qualifying Recognized Overseas Pension Scheme, as the name suggests, is a pension scheme that helps to transfer pension funds from UK to pension scheme providers in New Zealand. British expats to a far-flung place such as New Zealand on an average number up to 30000 in a year. Many of them are unaware that there is a possibility of transferring their UK pensions to New Zealand. The HM Revenue and Customs issued changes in the rules on 6th April 2006 facilitating pension fund transfers from UK to New Zealand via the QROPS New Zealand scheme.

Around 57 different QROPS providers approved by the HMRC operate from New Zealand thus offering a variety of options to British pensioners wanting to settle in New Zealand. The very fact that the QROPS New Zealand scheme is governed by the HM Revenues and Customs adds to its legitimacy and removes any apprehension regarding availability of UK pension funds from the minds of retired British expats migrating to New Zealand.

Under the QROPS New Zealand scheme, although the pension fund itself is taxed, the transfer process and benefits drawn from the pension are exempt from tax. Additionally, the scheme also provides more that 25% tax-free lump sum although this is applicable only after the pensioner has stayed outside UK for 5 complete tax years. The pensioner also need not pay any inheritance tax or death duties. However, the most compelling reason for transferring funds is that as per New Zealand legislation, there is no need to purchase an annuity owing to which capital withdrawal at any time becomes possible and unused pension funds after death are made available to chosen heirs rather than annuity providers. Also, the entire process of fund transfer takes approximately 2-4 months only.

With the exception of the state pension and any other fund for which an annuity has been bought, all other UK pension schemes are transferable via QROPS New Zealand. However, under certain circumstances, UK pension fund transfers to New Zealand may not be completely tax-free and the scheme is most viable only when cash transfers range between 20000 and 100000. Moreover, tax-rules between UK and New Zealand are subject to change at short notices. Hence, it is crucial to take advice from experts for true benefits of fund transfer against any other available option.

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