UK Pensions in Guernsey
With the highly taxed economic environment, An increasingly popular solution is to transfer your pension fund into a QROPS based in Guernsey as non Guernsey residents become free from all tax. This includes income tax, capital gains tax and inheritance tax.
Guernsey is protected by the British Crown, but has been independent since the 13th century. The island offers political stability and constitutional independence from the UK, having its own legislature, judicial system and tax laws.
In order for a pension provider in Guernsey to obtain QROPS status, they must meet a number of HMRC QROPS rules that relate to when and how benefits can be taken. The provider must also comply with reporting requirements for five complete tax years after the pension fund holder has left the UK.
There are some QROPS which have rules where you must be resident in the country where the recognised pension scheme is located, others do not. In this case you can opt for a tax friendly jurisdiction such as Guernsey which has more flexible rules on how the benefits can be taken and invested.
Some advantages in moving your current UK pension into a Guernsey QROPS are:
- The ability to invest the balance in a much wider variety of investment options
- 30% of your fund could be withdrawn from 50 years of age
- When you die your fund can be passed over to who ever you choose without having to pay inheritance tax whereas a tax charge of up to 82.5% can apply to a UK pension
- You can choose to receive your income in Euros or any other currency and therefore will not be subject to the exchange rate risk when you receive your pension in your country of residence such as Spain for example
For further information on QROPS transfers and for a qualified QROPS adviser to contact you, simply fill in your details in the contact a QROPS adviser page to receive free QROPS advice.
