Making Your Retirement Overseas Easier With A QROPS

Forget the wine, food and warmer climes; to make a successful move abroad, three main factors need considering if your new life.

Top of the list are property, tax and finance.

The three go hand-in-hand and need sorting out before you make a move if things are to run smoothly.

Property

You probably already have some idea of where you want to live and whether you are buying or renting a home.

You also have to consider what to do with your UK property, if you own any.

Selling your home before you go is probably necessary to have a cash pot to rent or buy at the other end.

If you have investment property and need to sell that as well, then do not sell until you become non-resident. UK residents pay capital gains tax, but non-UK residents do not.

Tax

Besides capital gains in the UK, you have to consider whether you pay any similar tax on your UK property disposals in the country you now call home.

Other key taxes are income tax on your pension and investments and inheritance tax on your estate.

Finances

You have no choice about taking your State pension, as is wherever you live. Other pensions are a different matter.

Many expats or international workers with a UK pension take the benefits in Sterling that cuts their spending power overseas because of currency fluctuation between the Pound and other major currencies. Keeping a personal or employer pension in the UK also means having to buy an annuity that dies with the holder.

One solution that eases the financial problems Brits and international workers with UK pensions have is a QROPS.

This is a special offshore pension scheme that has similar rules to a UK personal pension but eliminates some of the downside -

• Benefits are paid without income tax deducted in any major currency, so you can live in a low tax country and increase your spending power because the money you receive is not affected by exchange rate changes.
• Most UK pension funds that have not yet purchased an annuity can be transferred in to a QROPS scheme, so you retirement savings can be consolidated and maximised.
• QROPS holders do not have to buy an annuity and in most cases, the fund is exempt from inheritance tax when the policyholder dies, so is passed in full to the beneficiaries.

Just think of how much more relaxing your retirement will be without the stress of worrying about living on a fixed income and paying taxes in the UK when they are lower where you live.