Q and A pensions: Take your Qrops and fly away

When your client wants to move abroad and take his pension with him, what options does he have? A Qrops would appear to be the answer, says Rachel Vahey of Aegon Scottish Equitable.

‘Yes, that’s fine, Harry. Michael and I will be here so just pop into the office on your way home and we’ll chat about it,’ said Rose putting the phone down.

‘Problem?’ Michael asked looking at an exasperated Rose.

Rose shook her head. ‘That was Harry Pringle. He’s considering some life-changing decision and wants to come and talk to us about it. I had hoped to meet some friends for dinner.’ She sighed.

Two hours later Harry walked into Rose’s office. He was hardly recognisable; Rose thought he had aged 10 years since she had seen him earlier that year. Harry worked for an investment bank which had been hit hard in the latest fallout from the credit crunch, according to the newspapers. From Harry’s appearance it seemed it had been every bit as bad as she had read.

‘Help yourself to coffee, Harry. I’ve asked Michael to join us. I’m intrigued, what is this life changing decision you alluded to?’ asked Rose smiling.

Something entirely different

‘I’ve been thinking about it for sometime now. Investment banking is not the best place to be right now as I’m sure you’re quite aware. The bank needs to downsize and is considering offering redundancies. I thought I might take this opportunity to do something entirely different with my life. I’ve been at the top of this business for a long time now; I’m worn out and need to consider my priorities.’ Harry fidgeted in his seat.

Rose and Michael looked intently at Harry waiting for the punch line.

‘I’ve decided I want to spend more time with my wife and four children, play golf, maybe set up a small business. But most importantly I want to get away from this awful weather and move to warmer climes. The only thing stopping me is my pension. I’ve got almost a million pounds in my company pension and I’m expecting a bit more if I get redundancy. So I’ve got a fair amount, but can I take my pension overseas?’ elaborated Harry.

Qrops

Michael saw this as an opportunity to shine and jumped in quickly. ‘The simple answer is yes. Traditionally UK pensions have been tied up in layers of restriction and regulations. But the good news is that some of the restrictions have now been lifted for people living overseas or about to move to a new life abroad. It’s possible to move your UK pension into a qualifying recognised overseas pension scheme (Qrops). This is a pension scheme regulated by the country in which it’s established and recognised for tax purposes in that country.’