At Meyado the most common question we receive is, "What are the main benefits of QROPS?"
There are 2 main benefits, Income Tax and Death Duty.
Income tax applies to income in the UK. It is possible that you may reclaim income tax once paid from your pension income, but this is not always possible and at best will incur administration, time and hassle. Income from QROPS is paid free of UK tax.
Secondly, there is no Death Duty to pay on your QROPS fund when you die. That is to say that it stays outside of your estate for Inheritance Tax purposes.
Of course every client has different circumstances and there may be aspects to consider in your particular circumstance, we are always happy to discuss QROPS on a no obligation basis. Simply contact singapore@meyado.com or visit our website http://www.meyado.com.sg/ for more information
Monday, February 28, 2011
Monday, February 21, 2011
Guernsey QROPS Update
Tax Free Cash is now 30% for members of QROPS schemes who have been out of the UK for more than 5 years, effective from 1st January.
Important UK pensions news and Guernsey QROPS update
It doesn’t come as much as a surprise that UK pensions are under further attack from the UK! These proposed changes are now under discussion and set to be implemented in April after the budget:
The Treasury hopes the changes will eventually save it more than £4bn a year, and this will come from UK Pensions. Thus, if you have a UK pension , in all likelihood you will be funding some of this. These are some of the proposed changes:
1) Lifetime allowance is changing from £1.8m to £1.5m, thus, taxing an additional £300 000.
2) Any amounts above the Lifetime Allowance will be taxed at 50%, rather than previously at 25%. Thus, the extra £300 000+ will be taxed at double the rate!
3) The test for Lifetime Allowances for Final Salary schemes will change, increasing the lifetime allowance value, thus attracting the additional taxes. Previously a factor of 10 was used, now a factor of 16 is proposed.
4) Annual contribution into UK pension will be reduced from £255 000 to £50 000.
5) Should you die a flat tax rate of 55%. Thus, on death you lose over half.
Thursday, February 17, 2011
Pension benefits for persons aged between 50 and 55
From HMRC:
Pension transfers for people aged 50 to 55
The Government intends to bring forward regulations to remove the unauthorised payments tax charge where an individual aged 50 and over but under 55 transfers their pension in payment to another pension provider. The Government intends to backdate the regulations to cover transfers made on or after 6 April 2010.
Background
The normal minimum pension age increased from age 50 to 55 from 6 April 2010. Since then, people can normally start receiving their pension payments without paying the unauthorised payment charge only once they have reached 55. Someone aged 50 and over but under 55 who started drawing their pension before 6 April 2010 can normally continue to draw it without paying the charge, even when they are not yet 55. However, we have become aware that unintentionally the legislation imposes the charge if such an individual transfers their pension before age 55 to a new provider.
The Regulations
The proposed regulations will apply to an individual who is aged 50 and over, but under 55, and who has already satisfied the normal minimum pension age test of 50 and over prior to 6 April 2010. The regulations will apply where:
• sums and assets of an income drawdown fund are transferred to a new income drawdown fund with another provider or,
• sums and assets underpinning an existing lifetime annuity are transferred to another provider to provide a new lifetime annuity or,
• sums and assets underpinning an existing short term annuity are transferred to another provider to provide a new short term annuity or,
• sums and assets underpinning an existing scheme pension are transferred to another registered pension scheme to provide a new scheme pension.
The regulations will ensure that there will be no unauthorised payment tax charge on these sums and assets and any payments of pension after the transfer.
Where, in advance of the regulations being made, scheme administrators act in accordance with this announcement, neither they nor members will need to pay the additional tax charges for failing to operate in accordance with the existing legislation.
We intend to publish draft regulations to cover these changes for comment as soon as possible. If you have any questions about this announcement, please contact the HMRC Pension Schemes Services helpline on 0845 600 2622 or e-mail pensions.policy@hmrc.gsi.gov.ukGuernsey QROPS
In November 2010 The States of Guernsey approved changes to modernise their pension arrangements to become more competitive against the rising number of QROPS jurisdictions globally.
The main change was to allow a 30% lump sum, along with other simplification excercises.
The main change was to allow a 30% lump sum, along with other simplification excercises.
Tuesday, February 8, 2011
QROPS Update
From our friends at Sovereign:
UK Pensions Update
It doesn’t come as much as a surprise that UK pensions are under further attack from the UK! These proposed changes are now under discussion and set to be implemented in April after the budget:
The Treasury hopes the changes will eventually save it more than £4bn a year, and this will come from UK Pensions. Thus, if you have a UK pension , in all likelihood you will be funding some of this. These are some of the proposed changes:
1) Lifetime allowance is changing from £1.8m to £1.5m, thus, taxing an additional £300 000.
2) Any amounts above the Lifetime Allowance will be taxed at 50%, rather than previously at 25%. Thus, the extra £300 000+ will be taxed at double the rate!
3) The test for Lifetime Allowances for Final Salary schemes will change, increasing the lifetime allowance value, thus attracting the additional taxes. Previously a factor of 10 was used, now a factor of 16 is proposed.
4) Annual contribution into UK pension will be reduced from £255 000 to £50 000.
5) Should you die a flat tax rate of 55%. Thus, on death you lose over half.
Subscribe to:
Posts (Atom)