As the world becomes more accessible, more and more people that experience living and working overseas are deciding not to go home. However, for some, the lure of what they know best and being much closer to friends and family is too strong, and returning home means there are important financial matters to address. This is where Mathstone’s repatriation services can prove invaluable.
Realigning your investment portfolio to avoid unnecessary taxation through non-compliant investments, adjusting your QROPS pension to a SIPP to reduce costs, or reviewing your life insurance cover are just some of the easy ways to save and significantly reduce costs.
Mathstone can help you with the do's and don'ts of repatriation to make sure your transition home is as smooth as possible, and you don't get any nasty surprises later when you least expect them.
Your Repatriation Service Options
Sticking With Your QROPS
If you’re seriously considering a move back to the UK, after having lived abroad for 5 consecutive years, you will need to give some thought to how you will continue to access your QROPS and the funds within. In this you essentially have two options; keep the QROPS or have it converted into a SIPP.
Choose the former option and you will be required to pay the relevant amount of tax, in accordance with the laws of the country in which the QROPS is based. Tax will be due as soon as you’re back in the UK and start to drawdown funds. In addition, you will also have to pay UK tax on any payments that benefited from UK tax relief, having been made through an overseas pension scheme. The amount you pay will depend on a series of criteria. Furthermore, should you die as a UK resident, a 55% death tax rate would be applied to the remaining QROPS funds.
Converting A QROPS into a SIPP
At Mathstone, we recommend that you formally transfer your QROPS into a SIPPs, a form of flexible pensions scheme which is based in the UK and regulated as such. In doing so, you remove the risk of your QROPs being removed from the HMRC recognised list, or having to comply with any future changes to the scheme.
The annual management and running costs of a SIPP are typically lower than that of a QROPS scheme, and there is no obligation to pay a 55% death tax on SIPP funds. All UK based pensions have had this requirement scrapped (but not QROPS).
Accessing your pension funds is far easier with a UK based pension like a SIPP. You can drawdown funds unrestricted as and when you require, as well as invest in a wider range of investment types, including commercial property. Be aware however, that once you’ve exceeded the tax free lump sum limit, you will be required to pay tax again at the relevant marginal rate. In addition, there may be a number of complications if you have already withdrawn significant sums from your QROPS.
Please note that some of the information on this page is only applicable to UK residents.