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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 Dubai

The United Arab Emirates, in particular Dubai, is a very popular destination for British ex-pats. The lively international community combined with hot weather and a favourable tax regime means that you can live out your retirement in complete luxury.

Dubai was originally built on wealth generated by the oil industry, it’s now also a centre for financial services, tourism and great shopping opportunities. Imagine being able to live a five star lifestyle daily.

However if you are retiring to Dubai, what do you plan to do with your pension? If you leave it behind in the UK the British taxman will still be entitled to take his share. When you consider that you’ll be living in a place which is virtually tax free, needlessly handing over your hard earned cash may be a little difficult to stomach.

Advantages Of Living In Dubai And Having A QROPS

One of the main advantages of living in Dubai is having almost no tax to pay, this is where getting a QROPS can really come into its own.

Unlike Spain and France there are no complications or problems with trust structures for QROPS. Therefore the United Arab Emirates seems to be the perfect place to have one.

Alternatively if you do fancy holding your pension elsewhere you will be pleased to know that QROPS can be based anywhere in the world that HRMC approves. This means that you could get a QROPS from a provider placed in a low tax regime, for instance Guernsey, and receive the income in Dubai without having to pay any tax at all. If this sounds a little like having your cake and being able to eat it, then you’re probably right.

Find The Right QROPS For You

If you’ve moved to the United Arab Emirates you may find numerous financial advisers have made contact with you to try and entice you with investment products. The trouble with QROPS is that the HRMC rules surrounding them are very complicated, therefore using a financial adviser in the UAE who has no connection with the United Kingdom, may be risky. Overseas investments products are usually difficult enough but pensions are in a league of their own when it comes to complexity.

If an unregulated adviser happens to get it wrong you could end up with a hefty tax bill to pay and may also be liable for additional penalties. On the other hand a QROPS adviser with a good understanding of HRMC’s rules can certainly help to guide you through the necessary regulations to a lucrative QROPS for a Dubai resident.

For more information, visit the HMRC website here.

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