How to transfer your QROPS, from UK to India (Step by Step QROPS Transfer Guide)

Step by Step QROPS Transfer Guide

Step 1: Obtain a transfer value for your UK Pension (check with your Annual Pension statement or ask your financial advisor).

Step 2: Discuss and Identify the target Indian Pension Scheme (Check and verify that it is registered with HMRC).

Step 3: Contact your UK Pension house to get the pension transfer documents (Outside UK).

Step 4: Complete the transfer paperwork.

Step 5: Contact the respective Life Insurance Company and send the pension transfer documents to them.

Step 6: Life Insurance Company shall send you the completed documents back to you in UK.

Step 7: Once you receive the documents, you would need to submit it with the UK Pension house, who shall do a check to ensure that all is rightly filled.

Step 8: Once all in place, your UK Pension shall be closed and funds shall be sent via Wire Transfer to your Life Insurance Company.

Who can do a QROPS transfer?
If you have left the UK or intend to leave you can transfer your pension using a QROPS. All pensions are transferrable, including public sector pensions (i.e. doctors, teachers and nurses). Both British and non-British citizens can transfer their pensions

Who can move their pension into a QROPS?
Any NRI/PIO who has a UK registered pension scheme or any Indian, who has some accumulations into UK pension scheme.

How long does it take to transfer my UK pension fund to a QROPS?
The process will normally take between six weeks to two months. However, where the transfer is from an occupational pension scheme the process will take longer.

What types of pension can be transferred to a QROPS?
Any UK registered pension schemes are acceptable, as long as the terms of the said schemes permit transfer and the receiving QROPS provider is willing to accept it.

Can I transfer more than one pension into a QROPS?
Yes, you are able to consolidate/transfer any number of pension holdings into one QROPS. This can reduce cost, administrative burden and create scope for improved investment management.

What is the minimum amount that can be transferred into a QROPS?
It appears that there is is no minimum amount as per pension regulations in the UK. However you are advised to check with your pension scheme administrator in the UK on the same and the tax implications if any.

What about taxation of QROPS?
The one third amount from the corpus can be withdrawn as a tax free income and rest of the amount has to be used to purchase an annuity. Apart from choosing an annuity product with us, you also have the option to choose annuity product from other life insurers in India at the time of vesting age. Annuity will be added into your income and will be taxed accordingly. Please note that tax benefits are subject to change from time to time. You are advised to consult a tax practitioner to understand the tax implications at the time of transfer to the QROPS.

What happens to your QROPS in event of death?
Because you are not required to buy an annuity, it means that should you die with remaining funds, all these remaining funds can be passed on to your beneficiaries, and not be subject to usual UK taxes.

Why to transfer your QROPS India (Or QROPS Benefits)?
For those intending to retire out of the UK, a QROPS can provide significant benefits.
A typical UK pension scheme (both private and public) will see the pension reduced by 50% on death of the pension holder. QROPS places the pension in trust – beneficiaries will have access to the whole pension pot, i.e. 100%.
A UK pension is liable to income tax, regardless of your residence. This could be as high as 50% of your annual pension entitlement. A QROPS transfer can reduce your income tax liability to ZERO. The pension is 100% YOURS.
In some circumstances your UK pension will be liable for a 35% inheritance tax. After age 75 this tax becomes 82%. A QROPS transfer will make your pension inheritance tax free. Your beneficiaries will enjoy 100% of the pension proceeds.

Other benefits include:

1. The ability to take a 25% tax free lump sum at retirement.
2. The removal of annuity purchase.
3. Investment and currency choice freedom.

What is the 5 year rule?
For the first 5 full tax years that the member is non UK resident the Trustees must report any payments made to the member of a QROPs, for this period the scheme must act in the same way as a UK pension scheme.

What happens if I return to the UK?
The QROPS scheme can stay as it is however the reporting requirement will start again and the scheme will become subject to UK taxes once more. It may be possible to transfer to a QNUPs to retain some of the benefits of a non UK pension scheme.

If I have bought an insurance company annuity, can I still transfer to a QROPS?
No, you must transfer to a QROPS before you buy an annuity. If you are taking a pension “drawdown” from the fund, you can still transfer it.

Can I transfer my state pension into a QROPS?
No, QROPS is for private pension schemes only.

What lump sum can I take?
At least 25%, some will allow 30%, a few will allow more, in most jurisdictions at least 70% must be used to pay a pension.

Can I invest in Residential Property?
No, UK tax relieved funds can never be used to invest in Residential Property.