Qualifying Recognised Overseas pension Scheme (QROPS).: September 2013

Monday, 30 September 2013

UK pensions transfer to a QROPS Overseas (India)- Pension Transfer Warnings

Transfers to Overseas arrangements are permitted under UK law, but depending upon the status of the Receiving Arrangement, there may be tax charged triggered. There is no tax charge triggered if the transfer is made to an overseas arrangement that is registered as a ‘Qualifying Recognised Overseas Pension Scheme’(QROPS) as defined under UK Finance Act 2004.

Pension Transfer Warnings

Authorized overseas transfers can now be made into ‘Qualifying Recognised Overseas Pension Schemes’(QROPS). Every UK Pensioner will take reasonable steps to ensure that a Member’s pension transfer is an ‘authorised payment’ under UK tax rules.

Occasionally , it turns out that a pension scheme that appears to be legitimate is involved in a fraudulent activity known as ‘pension liberation’ or trust busting’. The Member should be suspicious if the receiving scheme has offered to pay Member’s full benefits directly to him as a cash sum, minus a commission charge. The Member could be left with a tax bill of up to 55% of the total payments made in this way.

If the transfer is to an overseas pension scheme, for example, if the transfer is to a HMRC recognized Pension scheme in India, it is always good to seek expert advice on the tax rules in the country(for example India) in which the receiving scheme is based. In some countries, you could be taxed on the transfer itself or on subsequent investment returns (please note HMRC recognized QROPS are not only in India but also across the Globe and you can choose any QROPS across the Globe including in India to get your UK pensions transferred). In many others you could suffer adverse tax consequences if the tax rules do not permit a transfer from a UK pension scheme.

If you are looking to transfer your UK Pensions (NHS or any other UK Registered Private Pensions) to a QROPS in India or to any other QROPS across the Globe & if you are unsure about the potential consequences of your Pension Transfer , Please do contact me with below contact details.

FOR STARTING UP OF THE TRANSFER PROCESS CONTACT :

Anusuya .R

Financial Advisor

SBI Life Insurance Co LTD,

# 23, Yamuna Complex,

1st Floor, 7th Cross, Malleswaram,
Bangalore: 560003.

M +91 9980927393

Email: qropstoindia@gmail.com

Sunday, 22 September 2013

Advantage NRIs/PIOs after Rupee fall by transferring their UK pensions to a QROPS in India

The rupee has fallen to the extent of about 24% in the last four months. It’s no doubt if policy makers gone sleepless. But for NRI’s/PIO’s it has created a golden opportunity to earn significantly higher value for their foreign exchange and at the same time park money in India. Still there is no agreement as to where the rupee would stabilize.

While USD stands at Rs 62 over INR, One British sterling equals to almost 100 today. That means 100,000 GBP is equal to 1,00,00000 INR. For an NRI who would have got Rs 54 Lakh for 100,000 USD four months ago, he will now get INR 67 lakh now. As mentioned above Since 100,000 GBP equals to 1,00,00000 INR, this gives great opportunity for UK NRI/PIO/OCI card holders to make most of this increased Exchange rate by transferring their accumulated UK pensions to a ‘Qualifying Recognised Overseas Pension Scheme (QROPS) in India.

Indian professionals do contribute to UK pensions through their UK employers to avail various financial benefits including tax benefits in UK. India based UK professionals like engineers/accountants/finance professionals had been continuously contributing to UK registered Pension schemes through their employers. The accumulated pensions range from 2000 GBP 200,000 GBP.

But professionals like doctors had been contributing to NHS pensions for relatively long time than any other India based professionals. The accumulated pension Corpus for doctors range between 25,000 GBP to 400000 GBP. HM Revenue & Customs of UK recognizes few pension schemes in India as ‘Qualifying Recognised Overseas Pension Scheme(QROPS) & issued acceptance letters to the respective Insurance Companies as a proof of recognizing few pension scheme as QROPS. The QROPS program was launched on 6 April 2006 as a part of new legislation with the objective of simplifying pensions.

At current rupee levels and with the sluggish conditions in many markets that are expected to remain for the next few months NRI’s/POI’s who accumulated UK pensions could possibly benefit substantially by transferring their UK pensions to QROPS in India. Especially India based UK doctors could possibly benefit substantially by transferring their NHS pensions to a QROPS in India.