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Good News For Expats And Pension Funds

30 September 2009

Did you know that if you move to France you can move your pension fund too? This is good news for British Expats whose pensions are probably their most important asset apart from their house, says financial adviser Simon Ludden.

Simon, financial planning manager at leading regional law firm Furley Page, comments: “Moving your pension to a qualifying registered overseas pension scheme (QROPS) can eliminate the risk of it declining in value against the Euro. It also gives you a number of potential benefits in addition to the regular UK ones.”

These include:

  • you’re not required to take out insurance-based annuities – even at the age of 75 – although it’s still an option
  • there are significant inheritance tax benefits after five years and the balance can go to a loved one on your death
  • you can still receive a tax-free lump sum as in the UK
  • income or withdrawals can be paid gross – but you may need to account to the tax authorities in the country in which you live
  • the schemes are often based in reputable financial centres such as the Channel Islands with a wide variety of investment options

Simon warns against schemes that abuse the system and have attracted the attention of the UK tax authorities such as those claiming they can offer up to 100% of the fund as tax free cash. You should also be wary of facilities allowing you to take all of the money out as cash after the stipulated five years. (QROPS have to report to Her Majesty’s Revenue and Customs - HMRC - for five years.)

“HMRC has made it clear than any company manipulating more than the usual tax-free lump sum available will have all of its applications revoked,” he says. “Even if your application hasn’t been singled out, you could find that your QROPS is no longer valid.”

Footnote: financial advice in favourite expat locations such as France and Spain isn’t as well regulated as in the UK.

For further information contact Simon Ludden on 01227 763939 or email stl@furleypage.co.uk

 

Notes to editors

Established in 1725, Furley Page Solicitors has offices in Canterbury, Chatham, Whitstable and Lloyds of London offering legal services across wide-ranging practice areas in commercial and private client law. It is led by 21 partners and supported by more than 100 legal staff. Furley Page is recommended by Chambers and the Legal 500. Furley Page is authorised by the Financial Services Authority to offer independent financial advice.

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