Qrops Pension: Retiring in Spain

QROPS 2014

Qualifying Recognised Overseas Pension Schemes

The Financial Conduct Authority (FCA), which replaced the FSA in April 2013, has made it MANDATORY that when UK regulated advisers meet clients who have moved or intend to move abroad, they must be told about the option of QROPS. This shows how important this option has become.

There is one question which is rarely asked but is also vital ‘Is QROPS right for me?’ So many adverts assume that it is, but a skilled adviser will also look at alternatives.

Taking account of major changes announced in the UK Budget 2014, some of which have happened and some which are planned, is also key. So you need advice not just an assumption that QROPS is right for you.

For most people, in the UK, their pension is their second biggest asset after their home. When they emigrate they have this important asset which needs careful control. Once the individual emigrates, or plans to emigrate, the possibility of transferring to a QROPS becomes an option, which the FCA insists must be discussed.

The principal advantages are;

The fund will be free of UK Inheritance Tax
In most situations, the income can be paid gross
Income limits imposed by HMRC will cease after a qualifying period
No requirement to buy an annuity, which is especially beneficial when interest rates are so low
The funds within the pension fund can be invested more flexibly. In fact, some QROPS Trustees allow self investment similar to a SIPP
Consolidation of disparate funds into one
Taking income is no longer controlled within the scheme rules but is more flexible

Looking at Jurisdictions
There are many available and these need to be discussed with an authorised and regulated adviser. Each has their own benefits but matching YOUR needs is an IMPORTANT aspect of giving best advice. I have chosen 3 of the most popular jurisdictions to show some of the differences;

Malta has four distinct advantages when dealing with UK pension clients, especially those who become residents in Spain.

Malta is an English speaking country
A low cost economy
A member of the European Union
Retirement income can be taken at age 50

Without question, Malta benefited most from the rules changes which became operative from 6th April 2012

I can recommend an adviser if you email me.

Gibraltar has approved QROPS and this option is developing, quickly.  Up to 30% pension commencement lump sum can be taken from age 55. Income is taxed at a flat rate tax of 2.5% and declared as income in your country of residence. There are a wide range of investments available and self investment is permitted.

I’m happy to provide information on an individual basis if you email me

New Zealand remains a viable and strong option for QROPS. Please note that since 6th April 2012 full encashment is not possible.

The principal benefits which New Zealand enjoys are;

Tax Free Lump Sum is 30% of the Fund Value
Flexible income arrangements, as long as the 70% available for income rule is maintained
Tax Free investment portfolio which is ‘flexible’

As always, individual circumstances will dictate, but flexibility is certainly a realistic jurisdiction to consider. Email me to have access to professional advice

Why not Spain?

Spain is NOT a good jurisdiction for QROPS

Spain does not recognise a trust structure, which is necessary to accept a UK pension. Therefore any potential transfer to a QROPS by a Spanish resident would take assets currently in held in trust, out of trust, with negative taxation consequences.

It is much better for Spanish residents to have the capital sums written in trust but outside Spain and then for any income to be taken and declared in Spain.

Non-UK Nationals

I am aware that people of many nationalities have, from working in the UK, preserved benefits. Good news – you do not have to take benefits when the scheme says so. You may also be entitled to a UK pension transfer to QROPS. Just email for more details,as below.


The best advisers will compare all jurisdictions before making a recommendation. The determining of your priorities should be the overriding reason for recommending a particular QROPS. Some advisers only deal with one provider in one jurisdiction.

If you have received a recommendation and would value a second opinion please do not hesitate to
email me

Qualifying Recognised Overseas Pension Schemes (QROPS) are for professional advisers and their clients and hopefully the unqualified, unregulated imitators will disappear.

I guarantee that you will be given only REGULATED advice if you contact me (with brief details) by sending me an
email here


David Goodall
Financial Pages in Spain

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