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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 Singapore

Singapore is the only country to be thrown out of the QROPS organisation since the inception of qualifying recognised overseas pension schemes on April 6th 2006.

HM Revenue and Customs dismissed Singapore from the QROPS list without providing a reason in May 2008 and has also refused to reinstate the country despite the threat of court action.

No reason has ever been disclosed although the Singapore financial regulator did find a financial firm twenty one thousand pounds for allowing unlicenced advisers to provide QROPS and other financial advice. This happened just before the country was removed from the QROPS listing.

To date, the Singapore financial regulator has not commented on HRMC’s action in the public domain.

QROPS Singapore Investors Do Have To Pay Tax Penalties

Unfortunately, this has left hundreds of QROPS investors in financial difficulty because HRMC is demanding up to 55% of their original fund investment in tax and penalties for making unauthorised pension payments.

Some leading financial advisory firms however, have transferred more than a thousand of these investors out of Singapore into new QROPS by agreeing to new terms with the taxman.

The remaining investors are advised to move their pension funds to a new QROPS immediately to help minimise their losses.

To sum up the Singapore situation, the country is just one of more than forty countries operating one thousand four hundred QROPS pension schemes worldwide but remains the only country to be stripped of QROPS status.

The UK government’s statistics show that around 3,500 ex-pats and international workers with UK pension rights consolidate their funds into a QROPS every year and that the total QROPS funds under management exceed a whopping 0.5 billion pounds.

QROPS Are Very Tax Effective And Are Advantageous Investments

All the evidence suggests that on the whole the vast majority of QROPS schemes are very tax effective and certainly advantageous for investors. This is true compared to leaving pension funds in the UK as the QROPS providers run reputable and honest businesses.

Naturally like many products or services that involve large sums of money, unsavoury incidents do occur from time to time.

This is down to the darker side of human nature, rather than the fault with QROPS regulations.

Taking sound advice from a regulated adviser with a background in successful QROPS transfers is necessary for additional protection. Make sure the adviser is also experienced in QROPS transfers to the tax jurisdiction you choose, as the rules and regulations can differ enormously between countries.

For more information, visit the HMRC website here.