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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.

Qrops Pensions Isle Of Man

Searching for the right place as a home for QROPS is a good way towards a safe and sound investment with one of the best places to begin being the Isle of Man.

As an offshore financial centre, the Isle of Man provides good stability along with low taxes for many individuals and businesses.

Other tax havens promise more but often fail to deliver consistent stability and performance to match this island.

For QROPS pensions the Isle of Man is second to none, it shows how the world of finance can still offer forgotten virtues like honesty, trust and good customer service.

Benefits Explained For 50C Pension

The Isle of Man is once again set to lead again by example concerning offshore pensions with new 50C regulations. These regulations are well received with a new overhaul of QROPS that provides Isle of Man pension members with the following:

  • Up to 80% of the fund value available for tax-free drawdown on retirement
  • Lump sums, pensions and benefits paid gross
  • Low income tax and no capital gains tax or inheritance tax

These features took effect as a quick reaction to the challenge of other markets after companies tried to tempt UK ex-pats to put their money into these funds. The 50C pension legislature actually came into effect on 22nd October 2010.

The Isle of Man government and financiers quickly realised that a risky manipulation of QROPS rules failed to deliver the correct solutions. They responded to this by stripping the QROPS down and re-building a state-of-the-art solution from scratch.

This means that anyone who has a UK pension and has left the UK or intends to do so, can be assured that their hard-earned investments are safe and accessible, while gaining in value in a low tax environment until required.

The Isle of Man QROPS revamp makes a larger share of the fund available as a tax free drawdown with added bonuses of pension payments paid gross. Now that the government has scrapped the view of low tax being a privilege for non-residents, it has extended the island’s low tax culture to everyone.

For more information, visit the HMRC website here.