Another bank holiday gave me yet another chance to sample the delights that UK airports have to offer. This time the travel was for ‘pleasure' and I at least had the company of family and friends to sweeten the pill.
However, a 4.30am check in followed by 12 hours in Manchester Airport, where they evidently adopt the same approach to the provision of seating as airlines use when overbooking flights, was sufficient to turn even my normally very well behaved six year old into Attila the Hun (only joking Ellie!).
I must confess that I am not one to keep my mobile phone switched on or the Blackberry by the sun bed when I am away with my family. Nevertheless, I found that over the course of the ten days I was away from the office I could not escape entirely.
Before I went away I had been devoting a lot of time to the subject of Qualifying Recognised Overseas Pension Schemes, QROPS for short. QROPS seem to be the hot topic for 2008. Indeed, I found that they remained a hot topic even whilst I was away.
On the first weekend of my holiday I was enjoying my regular Saturday morning horse riding when one of my fellow riders, who I have known for a while, announced that she is emigrating to New Zealand in the autumn and could I tell her anything about these new overseas pensions she has heard about.
Then, four days later, by which time I was on the beach (well the beach bar actually) I found myself talking to a very nice chap who seemed happy to share with me his plan to transfer his UK pensions abroad with a view to avoiding the inconvenient restrictions imposed by the UK registered pension regime. He appeared keen to help me share in this fantastic wheeze and even gave me the name of his adviser, recommending I got in touch on my return to the UK.
These two encounters very neatly encapsulate the two reasons why QROPS are becoming so popular; the increasing number of people moving abroad to live and retire and the possibility of using QROPS to avoid UK taxes and restrictions on drawing pension benefits.
For those internationally mobile individuals intending to retire abroad there is no doubt that QROPS can offer a flexible option. On the other hand, I believe that a degree of circumspection needs to be exercised. The way the rules are structured does present opportunities once the QROPS reporting requirement falls away after the member has not been UK resident for five tax years.
There is, however, much more to this than many people I have spoken to appear to believe. A QROPS member will, for example, need to consider the tax regimes in both the tax jurisdictions of their pension scheme and the place where benefits will be received. Furthermore, if planning is too aggressive, such that HMRC feel the regime is being abused, the rules may be changed or, as has happened recently with Singapore QROPS, HMRC may suspend recognition of a particular scheme or tax jurisdiction. QROPS is a potentially very complex area that needs to be handled with care.
Mark Wilkinson is head of development for AXA Wealth Management
The views expressed in this blog are those of the individual.IFAonline
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