Brexit may pose threat to expats QROPS transfers

Brexit may pose threat to expats QROPS transfers

Brexit may pose threat to expats QROPS transfers

In spite of the recent agreement giving both EU and UK expats the right to remain provided they enter not later than the end of the transition period, Brexit could still cause chaos for those wishing to transfer their pensions to a QROPS.

With an ever increasing number of Britons attempting to get ahead of the game by leaving the UK before the end of December 2019, transferring a personal pension to a QROPS looks to become ever more popular. However, the valuable tax-free transfers to an approved overseas pension may come to a halt due to the fact that the UK is no longer part of the European Union. The transfer charge is a swingeing 25 per cent of the value of the fund, a huge amount to lose for those depending on their pension savings to see them through their years as retirees.

Pension protestor William Wilson has started a petition aimed at getting parliament to at best debate the issue or, at worst, to give an answer to those concerned about their financial futures. The petition will need to have gathered 100,000 signatures to trigger a parliamentary debate, or 10,000 to spark a reply from British lawmakers. At the time of writing, just under 500 people have signed up, perhaps demonstrating the lack of concrete information being disseminated on this crucial subject.

Wilson believes the 25 per cent transfer levy is totally unfair to British expats who are unable to access a QROPS pension due to their choice of destination. He told the media the charge discriminates against the many thousands of older Britons who live outside the European Economic Area (EEA) in countries which don’t support QROPS pensions. The charge, he added, is totally unreasonable as it punishes QROPS members for their careful financial planning. Savers with other pensions such as SIPPS, he said, are able to live in the same countries as QROPS holders but are free from transfer charges when they move their pension funds.

At the same time, it’s possible that Brexit residency rules may complicate the QROPS procedure still more. If UK expats decide to apply for residency and citizenship in their new countries, everything from tax liabilities and wills to personal pensions will need to be reviewed. Also, depending on where in Europe they are living, those who retain their British citizenship may find they’re stuck in a tax dilemma.

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