There are an estimated 5.5 million British expatriates around the globe, which equates to roughly one tenth of the British population. They have combined pension assets of 625 billion pounds, and have an average income of 129,000 pounds a year.
With fears over underfunding of UK pensions the QROPS marketplace is increasing in size. 7,300 QROPs have been established so far with a combined value getting on for half a billion pounds.
HMRC through the recent budget has become more aggressive over taxation of UK pensions, decreasing maximum tax free contribution amounts from 255,000 to 50,000 and reducing the lifetime allowance to 1.5 million as of next April.
Residual values in pensions will be taxed at a lower rate but will still be 55% of the value.
Inheritance planning is a compelling reason to transfer into QROPS, in your onshore pension only 50% of the remaining value will pass to your spouse, less to your dependents if your spouse is no longer around. QROPS will legally avoid UK inheritance taxes for your estate.
Finally leaving the UK with a number of small pensions, consolidation makes accounting and managing your funds so much easier, and you can also invest into different currencies.
For specific information and advice on your own planning please contact me at markpaine@meyado.com
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