Are you aware that HMRC has cut all American QROPS?
From the 9th March 2017, the Chancellor of the Exchequer announced in his annual budget the introduction of an Overseas Transfer Charge (OTC). The OTC is, in essence, a 25% tax on any pension transfer to a QROPS for those that reside outside of the EEA (European Economic Area). As a result for anyone living in the US, an American QROPS became immediately obsolete as you would lose 25% of your total pension fund upon transferring.
Already moved to America?
If you have already moved to America and transferred to an American QROPS you may now face a tax charge of 25% depending on how long prior to March 2017 this was completed. If the overseas transfer charge is due, you will be jointly and severally liable to the tax along with the scheme administrator.
As of March 2017, if you haven’t move your pension to an American QROPS do not do so as you will incur the OTC charge without fail.
What can you do?
Whether you have already moved to America or are planning on doing so, you don’t need to worry about your UK pension. Harrison Brook has an international solution, that is fully US compliant and allows you to access your UK pension monies without facing huge taxes or draw-down fees. The answer is an International SIPP (Self Invested Personal Pension)
What is an Non-Resident / International SIPP?
An International SIPP allows for the transfer and consolidation of UK pensions to a single personal pension structure. An International SIPP allows the holder to access their UK pension overseas, whilst remaining under UK regulation.
Some other key features of an International SIPP include: Consolidate several pensions into one place.
- Tax-free lump sum.
- Low-cost charging structure (from Harrison Brook).
- Full flexi access drawdown.
- Invest in all major currencies
- Take control of your investments.
- Protected under UK regulations.
- Tax efficient saving
How to transfer an existing pension into an International SIPP
While the process of transferring an existing pension into an International SIPP is fairly straightforward, it is imperative that the transfer is done correctly and into a recognised and approved scheme, not an American QROPS.
Using the services of Harrison Brook, specialists in expat financial advice and services, will make sure the transfer is done correctly and cost-effectively, fully on a transparent ‘fee’ based model of advice.
Our fully qualified, market leading financial advisers are here to help. For any financial needs contact Harrison Brook today and receive free impartial advice.
The information contained herein is for informational purposes only which is subject to change and should not be relied upon. You should seek advice from a professional adviser before embarking on any financial planning activity.