No UK tax payable on pension income
Transferring your pension out of the UK to a QROPS means that you will no longer be paying UK tax of up to 45 per cent on your pension income. With a QROPS it may be possible to pay no tax, depending on your country of residence.
No tax on death. Although UK rules are subject to change, your beneficiaries will still have to pay tax at their marginal rate if you die over the age of 75. A QROPS has no tax on death at any age.
No lifetime allowance
Currently in the UK, the lifetime allowance is GBP 1 million and this was recently reduced from GBP 1.25 million. This has been reducing incrementally for several years now from an original limit of GBP 1.7 million. A QROPS has no lifetime allowance, so your pension can grow to any size without a tax charge.
Higher lump sum
A 30 per cent lump sum can be taken from a QROPS, while only 25 per cent can be taken tax-free in the UK. This will apply to anyone who has been non-UK resident for more than five years.
Currency and investment options
QROPS accommodates holding and investing funds in any currency, whereas a UK scheme may be restricted to GBP only. In addition, some investment options may be available that would not be available in a UK scheme.