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    Specialist Help For USA Residents

    It is estimate that there are over 1.5 million British expats now living in the USA. A very large proportion of this number will never return to the UK. Choosing to live out their twilight years in sunnier climes.



    The USA is certainly a favourite destination for many UK ex-pats, however transferring a pension into QROPS is problematic for stateside residents as well as ex-pats.

    For the first time some QROPS is now available that tackles the necessary legal and administrative issues that have prevented US residents and nationals from picking up the tax and investment benefits or transferring to a QROPS.

    QROPS advisers do confirm that the HM Revenue and Customs listings of QROPS have included several US 401(k) pension schemes more or less from day one of April 2006. In principle QROPS transfers were available to US nationals living abroad along with UK ex-pats moving to the United States.

    It does remain that the HMRC’s counterpart in the USA namely the Inland Revenue Service (IRS) has so far refused to recognise QROPS transfers into a QROPS USA 401(k) pension by UK ex-pats living there. The reason for this they claim is that the QROPS structure is not legal.

    A similar no-go status was imposed on US nationals overseas who transferred from a 401(k) to a QROPS.

    QROPS 401(k) And IRA Transfers

    Both triggered IRS tax penalties on any funds that were transferred.

    This unfortunately is likely to tighten up further from January 2013 when the Foreign Account Tax Compliant Act comes into force. The Act will virtually bar all US residents and US nationals living outside the country from transferring their pensions into a QROPS.

    Although this complicates any QROPS transfers in or out of a 401(k) pension some providers have managed to re-structure the master trust that manages a QROPS into a USA-friendly legal entity.

    This is a legal alternative that opens QROPS USA investments as a two-way street between transferring from a UK pension to a US QROPS and likewise from a US 401(k) to an offshore QROPS.

    The framework is now in place, however QROPS USA is still tied up in red tape and successful transfers do require patience, specialist skills and expertise.

    The possibility of moving QROPS pension transfers for UK ex-pats living in the US does open a new world of investment opportunities that were once unavailable.

Getting Advice On QROPS

QROPS (Qualifying Recognised Overseas Pension Scheme) advice can be obtained from many financial advisers. There are many websites appear to be general information sites that are actually run by Financial Advisers to promote their services. Instead, www.qropshelpcentre.co.uk is an independent website intended to give information on QROPS and help you find the right advice for you.

Where Do I Go For QROPS Advice?

By giving us your details we can arrange for a suitably qualified financial adviser to contact you about a transfer to QROPS. All the advisers that we we have on our panel have the necessary qualifications to advise on pension transfers.

How Do I Check That An Adviser Is Authorised To Give Me Advice?

All advisers (or their firms) based in the EU should be registered with the relevant regulatory authority in the country they operate in. Any UK based firm advising on QROPS should be regulated and the adviser will be registered individually with the regulator (Financial Services Authority). You can check the FSA register for both the individual and their firm. The requirements differ in other countries so check what the regulations are in the country in which the adviser is based. For your own protection it is alsways best to get advice where the adviser and the firm are subject to regulation.

What Should I Expect From An Adviser?

The first thing an adviser should do is obtain full details of yourr financial situation, what investments you have and your future plans. This can be done by completing a detailed fact find. The details should consider what level of investment risk you are prepared to take with your money.

The adviser should obtain written authorities from you allowing the pension schemes to provide him with the information needed to advise you on a the possible transfer to a QROPS.

Once the adviser has all the necessary information from the pension schemes he should complete a Transfer Value Analysis (TVA) which determines whether it is beneficial to transfer your UK pensions to a QROPS. The TVA should take into account what benefits you are giving up as well as what the plan could provide in the future. The TVA should take into consideration the level of investment risk you are prepared to take.

The adviser should also take into account the tax regimes of the country you are living in and the country where the QROPS is located.

You should expect an adviser to be happy to provide you with details of his recommendations and reasoning in a letter before you complete any application forms. It is also important for him to details the reasons for selecting the QROPS provider he recommends.

When the adviser has recieved the completed application forms, he and the QROPS provider should deal with all the relevant administration in arranging the transfer.

How Much Will The QROPS Advice Cost?

Advisers may charge you for giving QROPS advice on a fee basis, just like a solicitor. This fee is payable whether you take out a QROPS or not. The fee should be agreed in advance and confirmed in writing. If you decide to take out a QROPS, then it may be possible for the fee to be paid to the adviser by the QROPS provider and taken from your plan as part of the setting up charges. It is highly probable that the fees charged by an adviser would be under £2,000 for the advice and setting up of the QROPS.

The alternative is for the adviser to be paid commission. The comission will be incorporated into the costs of setting up a QROPS and in many cases can be significantly higher than a fixed fee basis of charging. For example if your pension pots are worth a total of £250k, a commission rate of 3% would give the adviser comission worth £7,500.

The information given in this article is strictly for information purposes only and is not to be construed as financial advice.

For more information on QROPS visit the HMRC website here.