QROPS Buy Out Bonds for UK Transfers
Individuals who previously worked in the UK, and are now resident in Ireland, can transfer their UK Pension into an Irish Buy Out Bond that is ‘QROPs’ approved by HMRC.
Only certain Pension Providers in Ireland provide the Qualified Recognised Overseas Pension Scheme (QROPs) product and Compass Private Wealth partner with them to transfer benefits to Ireland.
Having your UK Pension administered and managed in Ireland provides a lot more control to the individual and may mitigate certain risks, such as Brexit and Sterling.
There are a few conditions and investment restrictions to consider, so individual advice is needed. Some of these restrictions are listed below:
If the scheme you are transferring to has not been registered with HMRC as a QROPS, it could result in UK tax charges of up to 55% of the amount transferred.
The minimum retirement age on a QROPS is 55. You can only access your benefits before age 55 on the grounds of ill health.
If you've been resident in the UK anytime within the last 5/10 UK tax years, you may be liable to UK tax on your QROPS at retirement.
Payments from your QROPS within five years of the transfer will be subject to UK tax rules, regardless of where you are resident.
You can only access the benefits of your QROPS pension if you have not been a UK tax resident for at least 10 UK tax years.
A 25% overseas transfer charge on a QROPs pension transfer unless the transfer is to your employer’s occupation pension scheme, or to your country of residence or within the European Economic Area (EEA).
In addition, if your status changes within five years of the transfer, the 25% overseas transfer charge will apply. E.g. if you move outside of the EEA within five years of the transfer and don't transfer your pension to a new provider in your new country of residence, then the Life company providing the pension would need to deduct 25% of your QROPS value and pay it to HMRC.
QROPS Buy Out Bonds can accept transfers from both Defined Contribution (DC) and Defined Benefit (DB) Pension Schemes. Needless to say, the decision on moving a DB Scheme out warrants more careful consideration than transferring out a DC Pension scheme.