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Rakhi Vasavada
Rakhi Vasavada, Financial Advisor
Category: Finance
Satisfied Customers: 4545
Experience:  Attorney and Financial Expert. Have specialization in Financial Laws.Practice experience of over 13 years
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My husband & I moved to Switzerland on a full time contract

Customer Question

My husband & I moved to Switzerland on a full time contract of employment in August 2011. In Jan 2013 we transferred our UK pension funds into an HMRC approved Qrops scheme through De Vere. These are now mostly invested in structured notes which are due to mature in Jan 2018.
We now find that we have to move back to Uk, probably in April this year although there is some flexibility.
Can you advise if we need to move our pensions back to the UK and if so can we hold the structured notes until maturity in 2018.
Regards
Sue Melling
Submitted: 1 year ago.
Category: Finance
Expert:  Rakhi Vasavada replied 1 year ago.
Dear Sue, Hello and welcome. Thank you for providing an opportunity to assist you. I believe you not yet completed 5 years (Tax years) outside the UK as you say the pension was transferred to QROPS in 2013. Having said this, it is important for you to note at this point is A QROPS has no obligation to report cash withdrawals to HMRC once the member has been lived outside the UK for a minimum of full 5 tax years. Having said this -- More important is to note that there is NO NEED to move your pensions back to the UK and you CAN hold on to your structured notes until 2018.Even if you have slightest intention to move out of UK again, DO NOT transfer QROPS. However, you need to be offshore for 5 years to get the full benefits of a QROPS. I am sure this would help.You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question. Warm Regards,
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Customer: replied 1 year ago.
Hi Rakhi
Thank you for your reply which is good news. You advise us to keep our pension in Qrops if we intend leaving the UK again. However as my husband is planning to retire this is unlikely. If our final decision is to stay in UK is there an advantage switching the Qrops to a SIPP, and would we have to pay the (4%) initial charges again? If we kept the Qrops as UK residents would we be liable for 55% death tax? Also, would we be able to change to SIPP after we have started to draw on the pension fund?
Regards
Sue
Expert:  Rakhi Vasavada replied 1 year ago.
Dear Friend,Hello and welcome again.To begin with, people who are living inside or outside the UK can transfer their deferred company and personal pensions to a QROPS. Any pension can be transferred as long as an annuity has not been purchased or, if it’s a final salary scheme, that the pension has not commenced.You DO NOT need to leave UK Permanently to benefit from QROPS.You can continue to visit friends and family or return to Britain for any reason, provided you remain a non tax resident of the UK. So, you could return to the UK whenever you wish but the maximum length of time you can spend in Britain will be limited before UK taxes apply. For example, you must beware of the six-month rule and the three-month average rule to avoid becoming resident in the UK again for tax purposes and losing the advantages of QROPS.So far as advantages of transferring your QROPS back to concerned, there are no major advantages to doing so. Note that QROPS are subject to the rules of the relevant tax authority in the country or territory in which the assets are situated. You would also need to consider that they will have :==>Restricted access within a QROP compared to a UK based pension==> 55% death tax would be due on a QROP if die as UK resident Also, you will NOT be able to change to SIPP once you have started to draw on the pension fund. So, once again, I would advice you to defer your decision to transfer QROPS, if possible. Spend some time in UK and if at all you feel that there are even 1% chances of going out of UK again, you should NOT transfer as of now.I am sure this would help.You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question. Warm Regards,
Customer: replied 1 year ago.
Hi Rakhi
Thanks for your prompt reply. We have studied the 'residency' rules and know that on our return we will be classed as temporarily non resident therefore NOT non-resident for the last 4 years. Just to clarify, if we stay permanently in UK, transferring to a SIPP would give us unrestricted access to our pension and no liability for 55% death tax. We would not look at doing this until 2018 when we will look at drawing our pension, when I guess the rules may have changed again!
Regards
Sue
Expert:  Rakhi Vasavada replied 1 year ago.
Dear Sue,Hello and welcome again. YES, you go it right. 55% liability would occur ONLY IF you are holding QROPS and die as UK Resident. Since you are not doing this anyway until 2018, let us hope that the rules change for better. However, I see little change coming forward during this time frame. I expect a status-quo even by 2018. However, let us hope so.I am sure this would help.You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question. Warm Regards,