Where is Your Client Resident?

Australia is the most popular destination for British expats. Residents of Australia can transfer their UK pension to an Australian QROPS which would not be subject to the Overseas Transfer Charge. The Australian Expatriate Superannuation Fund is an ideal savings vehicle for a resident of Australia as once members reach age 60, all benefits paid from the Superannuation are tax free and there is no tax on the growth of the fund.

Alternatively, if a transfer to an Australian QROPS is not suitable, a transfer from a UK pension fund to a New Zealand QROPS may as the benefits payable and fund growth are both tax free. This would however attract the Overseas Transfer Charge. A transfer to a New Zealand QROPS may be more tax beneficial even if the transfer is subject to the Overseas Transfer Charge. New Zealand and Australia have a favourable DTA regarding withdrawals from a New Zealand Superannuation Fund.

New Zealand is an extremely popular retirement destination for British Expatriates. It hosts one of the most favourable tax regimes as payments from NZ Superannuation funds are paid free of tax and if you decide to move elsewhere in the world, you may be able to utilise one of New Zealand’s many Double Taxation Agreements.

The UK has a Double Taxation Agreement (DTA) in place with New Zealand which grants the taxing rights for the income to the country of residence and therefore a SIPP may be the most suitable scheme if you do not want to transfer your pension to New Zealand.

The Middle East has a large population of British Expats however there are very little retirees due to visa restrictions. Many British expats seek employment in the middle east due to the high earning potential and low tax regime.

As the Middle East has no QROPS schemes, to avoid the Overseas Transfer Charge the fund must remain in the UK and therefore a SIPP would be the best option. The UK has a DTA in force with most of the countries in the Middle East which grants the taxing rights for the income to the country of residence.

If the member is unable to claim the Double Tax Treaty, a transfer to a New Zealand QROPS may be more beneficial as there will be no tax at source on income withdrawals and it would not be payable in the country of residence. The transfer would however be subject to the Overseas Transfer Charge.

Hong Kong is one of the most significant financial centres in the world so is a popular place for many expats.
Hong Kong has several QROPS schemes however you should consult a local adviser on the suitability of these.

A SIPP may be the most suitable option as the UK has a DTA with Hong Kong although the DTA states that the income from a UK pension would be taxable in the UK. A transfer to a New Zealand QROPS may be a more beneficial option as there will be no tax at source on income and won’t be payable in the country of residence. This should be considered when making large income withdrawals. The transfer would however be subject to the Overseas Transfer Charge.

The Far East has many destinations that are popular for expats due to the cheap cost of living.

As the Far East has no retail QROPS schemes, to avoid the Overseas Transfer Charge the fund must remain in the UK and therefore a SIPP would be the best option. The UK has a DTA in force with most of the countries in the Far East which grants the taxing rights for the income to the country of residence.

A New Zealand QROPS may be more beneficial as there will be no tax at source on the income and won’t be payable in the country of residence. This would however be subject to the Overseas Transfer Charge.

Switzerland attracts many expats with job opportunities, high salaries and a great standard of living.
Switzerland does have a local QROPS however you should consult a local adviser on the suitability of this scheme. It should also be noted that Switzerland is NOT an EEA country.

The UK has a DTA in force with Switzerland which grants the taxing rights for the income to the country of residence, and therefore a SIPP may be the most suitable option.

If the member is unable to claim the Double Tax Treaty or the local tax rate is high, a transfer to a Gibraltar QROPS may be beneficial as there will be only 2.5% tax at source on the income and Gibraltar has no Double Tax treaties in place. This would however be subject to the Overseas Transfer Charge.

South Africa may be a popular retirement destination for expats due to the cheap cost of living.

South Africa does have a local QROPS however you should consult a local adviser on the suitability of this scheme.

The UK has a DTA in force with South Africa which grants the taxing rights for the income to the country of residence, and therefore a SIPP may be the most suitable option.

If the member is unable to claim the Double Tax treaty relief or the local tax is high, a transfer to a New Zealand QROPS may be beneficial as there will be no tax at source on the income and won’t be payable in the country of residence. This would however be subject to the Overseas Transfer Charge.

The United States is popular with British expats as it is home to many of the world’s global companies.

The USA does have a local QROPS however you should consult a local adviser on the suitability of this scheme.

The UK has a DTA in force with the USA which grants the taxing rights for the income to the country of residence, and therefore a SIPP may be the most suitable option.

If the member is unable to claim the Double Tax Treaty or the local tax rate is high, a transfer to a Gibraltar QROPS may be beneficial as there will be only 2.5% tax at source on the income and Gibraltar has no Double Tax treaties in place. This would however be subject to the Overseas Transfer Charge.

Canada does have a local QROPS however you should consult a local adviser on the suitability of this scheme.

The UK has a DTA in force with Canada which grants the taxing rights for the income to the country of residence, and therefore a SIPP may be the most suitable option.

You could transfer to a QROPS and this would be subject to the Overseas Transfer Charge. However, this could be an option where the member is unable to claim the Double Tax treaty relief or the local tax rate is high, a Gibraltar QROPS may be more beneficial as there will be only 2.5% tax at source on the income and Gibraltar has no Double Tax treaties in place.

A SIPP would be the most suitable scheme for those residents in the UK. Although a transfer to a QROPS in the EEA would not be subject to the Overseas Transfer Charge, the benefits of a QROPS for a resident of the UK remain very limited.

Unless a local QROPS is available, you should check whether the country of residence has a DTA in force with the UK and the subsequent tax rates. A transfer to a QROPS in New Zealand or Gibraltar may be more tax beneficial even if the transfer is subject to the Overseas Transfer Charge.