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QROPS for the UK Expat in Spain

By Stephen Ward BA (Econ), ACII, APMI, APFS, AIFP - Tue 12th Jul 2011

We thought it would be useful this week to remind you about the attractions and versatility of QROPS for the UK non-resident who has come to live in Spain. In particular, for those who left the UK more than five complete UK tax years ago i.e. before 6thApril 2006.

QROPS have become much more accessible over the last few months as we have seen new schemes and jurisdictions open up. This has resulted in more competition accompanied by a reduction in fees and greater choose and options available for our clients.


Before considering jurisdictions and costs the key benefits of having your pension fund in a QROPS as opposed to in a UK scheme include:

1.) Greater flexibility of benefits – a higher lump sum can be possible if required.

2.) Tax efficiency - on taking benefit from a QROPS. If structured correctly income taken will be taxed at between 1.6% and 2.6%.

3.) Protection for dependents - following the QROPS member’s death a lump sum or income is available. With lump sums no UK tax is payable whereas in a UK scheme tax at 55% will typically apply.

4.) Greater investment flexibility.


With schemes based in countries including Guernsey, Isle of Man and New Zealand available, which is the best jurisdiction to choose? What is the best scheme to suit your particular requirements? Well that is where expert advice is required.


It is not going to come from those who “dabble” - arranging the occasional QROPS with a main motivation of making as much commission as possible from investments. Rather, it will come from experts who understand the UK pensions system in depth as well as the systems operational in the main QROPS jurisdictions.


There are for example two types of Isle of Man QROPS. One of these is totally unsuitable for residents of Spain as when income is taken a non-recoverable tax of 20% will be applied. Of the available Guernsey schemes, some are cost transparent whereas others will have you believe they are as cheap as chips (even ‘free’) whereas the truth is rather different.


New Zealand schemes are generally for those with smaller funds and who would prefer to receive an immediate lump sum. Funds that are left invested in New Zealand schemes are subject to tax at around 1.4% p.a. but the abolition of this tax expected later this year will suddenly make New Zealand an attractive longer term place to hold your pension fund.


Costs (where transparent) are tumbling and are becoming much closer to the fees associated with a UK-based self-invested personal pension. With set up costs of between £540 and £800, and annual costs in a similar range a QROPS as a long term home for your UK pension fund is much more accessible now.

For further information about QROPS and Pension Planning opportunities please contact us today via clicking the link Here and leaving a few basic details on the form at the foot of the page.

Comment on this Blog

How can we take 100% lump sum from a small pension fund £25K in the UK for a woman aged 53? We have been resident in Spain for 8 years. Also give me a rating on Blevin Franks I have a Guernsey QROPS with them. Thanks Brian
Brian Maciver - Sat, 22nd Jun 2013
Excellent article Stephen.
David Goodall - Thu, 18th Aug 2011

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