This is a guide to the features and benefits you would expect from an authorised QROPS.
Security of Plan provider
The Pension Plans are provided by UK Financial Services Authority authorised and regulated Merchant Banks and Insurance companies via their offshore centres, Typically The Channel Islands and The Isle of Man where the consumer protection is as good as or better than the UK, providing added peace of mind for continuity of service, product and accountability.
Transfers from existing UK Personal Pensions
The Plan is specially designed to take transfers in from other providers allowing you to consolidate your retirement or saving funds/assets into a tax efficient structure.
The scheme is accepted as a Qualifying Recognised Overseas Pension Scheme (QROPS) by Her Majesty’s Revenue and Customs (HMRC) and can receive transfers from UK Personal Pensions via a UK authorised and suitably regulated Independent Financial Advisory Firm.
Additional contributions are welcome
The Plan lets the Member make additional contributions to assist in bolstering their retirement or savings planning (minimum £1,000*). This provides a continuous solution for wealth management
Flexibility before Retirement. The Plan offers a Loan facility of up to 40% of the value of the Plan assets
The Member can borrow lump sums from the Plan and hence benefit from the capital within it before their retirement date.
There are many advantages associated with this, most obvious of which is that you do not have to go through a lengthy credit application process associated with borrowing from a bank.
Furthermore, the interest paid on the loan, if any, is owed to the Plan, ultimately benefiting the Member as that interest is paid back to your Plan and not a bank or finance house.
In addition, cash received by way of a loan is typically not taxable, whereas income by way of a pension benefit can be. This provides added opportunity for financial and retirement planning.
Debit Card (Visa) and Credit Facility.
The Member can enjoys the benefit of a pre-agreed Credit Facility and a Visa Debit Card in your own name (denominated in either £, € or US$). In essence this is a revolving overdraft facility. The advantage of this is that you decide when, where and on what to use your credit, knowing that the funds held within your Plan will finance the Debit Card up to the approved credit limit.
Another key point is that the Credit Account earns the same interest rate as your bank deposit account so no disadvantage should you require the flexibility of the Credit Facility
(Maximum lending from the Plan is 40% of the value of the Plan subject to any other Loan agreements or Credit Facilities already in existence within the Plan.)
No need to purchase an Insurance Company Annuity
On the death of the Member the residual value of their Plan passes to their Beneficiaries, unlike a traditional insurance annuity where any remaining assets become the property of the annuity issuer
The Plan typically falls outside of your estate
On a Member’s death their Plan’s assets can typically pass to their Beneficiaries without going through probate or being aggregated with their estate.
Flexibility for future generations
Even after the Member’s death, you have the following options:
1. To continue or start providing an income to the Member’s spouse or dependants;
2. To segment the fund to provide different types of benefit for the Member’s various chosen Beneficiaries;
3. To transfer the proceeds into a new Plan for the benefit of a Named Beneficiary;
4. To retain the Plan (hold in trust) for distribution at a pre-defined date or future event;
5. To wind up and pass the proceeds of the Plan directly into the Member’s estate for distribution from there; and/or
6. To wind up and pass the proceeds of the Plan directly to the Member’s chosen Beneficiaries
The Plan does not form part of your personal assets when established
Assets are held under a Pension trust as are all Pension funds. This provides the protection of assets from unreasonable claims.
Future Planning Estate and Succession Planning Benefits
The assets whilst in the Plan are free of income tax, capital gains tax, wealth tax (where applicable), donations tax (where applicable), and can be passed onto successors free of any tax (e.g. Inheritance tax (IHT)) and need not be taxable until the successor takes benefit. The actual benefits to a Member will always depend on their personal circumstances.
A carefully tailored range of investment strategies
You have a suite of investment strategies available for investment. These enable you to marry your risk and return profile to an optimised portfolio matching your personal requirements now and in the future (free switching between strategies).
Discretionary investment management utilising a multi asset, multi style, multi manager investment methodology
The Member has exposure to a full spectrum of assets from equities to property and bonds as well as commodities and alternative investments, together with the knowledge that some of the world’s most sought after investment specialists are managing your Plan’s assets.
Cash deposits to compliment investment strategies
You can place contributions into a base rate tracker deposit account in Sterling, Euro or US Dollars to meet liquidity requirements or a very low risk investment profile. A Member can split their contribution between an investment strategy (strategies range from very cautious to growth orientated) and cash, in a currency of their choice (Sterling, Euro or US Dollars).
Convenient switching of strategies within your Plan
A Plan that adapts to the Member’s changing life circumstances is key. Remember, switching between investment strategies are simple and free
Savings are tax efficient
Income and capital gains arising from the investments held within the Plan, or benefits paid by the Plan, are not subject to UK tax. This means that the Member’s Plan provides a very efficient tax free environment in which your contributions can grow (some withholding tax on dividends cannot be reclaimed).
Another benefit is that assets in the Plan are outside the scope of the EU Savings Tax Directive.
In addition, tax authorities internationally, including Spain, treat Retirement Schemes, and annuity income derived from them, favourably with typically only the income element of annuity payments attracting income tax. This can provide further benefits and may allow scope for financial planning. In most cases this reduces significantly the amount of income tax on income.
Annuity income and capital payments
The Plan provides a regular income option by way of annuity that can underpin budgeting or personal cash flow requirements. Alternatively, lump sum capital payments are an excellent way for Members to access cash and can assist in a myriad of scenarios from paying off a mortgage to purchasing a major asset. In certain instances lump sums can even be received tax free
Adapting to your life
The “Retirement Option” is distinctive in so far as it has the ability to adapt to meet the different requirements of pension legislation in many countries from around the world. This means that the Member’s Plan won’t become obsolete should you move between jurisdictions, and you won’t face the hassle of moving assets between providers in order to ensure that their savings remain tax efficient.
A neutrally located Plan
The Plan is domiciled in The Channel Islands or The Isle of Man, which means the Member’s Plan is held in a very favourable jurisdiction both from a political and tax perspective. This status protects the assets of their Plan should they live in or move to a country that imposes restrictions on the flow of assets across its borders, is politically unstable or has unattractive social or fiscal policies.
Also you will not be subject to future changes in UK Personal Pension legislation.
Convenient Reporting Online access
As a plan Member you can view the different elements of your Plan, whenever you like, to keep informed about its progress. All online.
Annual valuations
Members will receive at least bi-annual valuations of both the cash and investment element of your Plan. In addition, if you opt for a Loan or Credit Facility account, you will receive regular report for each.
Two fee structures: either fixed or percentage based
The plans fee structures are transparent and offer you a choice between two fee options, which lets you and your adviser select a fee which is most appropriate to the circumstances.
Call us now on
+44 (0)1884 860061
for a free informal discussion.
Or email gary.barlow@med-ex.co.uk