Under what conditions should I consider transferring my pension offshore?
Will you ever return to the UK in retirement and become a resident? If the answer is yes, then you should not consider transferring you pension offshore.
However, if you will be retiring abroad, even if it is still a little way off, you may wish to consider transferring your pension overseas.
Typically, your pension will be held in a trust in a jurisdiction which has DTA or Double Taxation Agreement with the UK. This agreement should allow the jurisdiction in which your pension is held to levy tax instead of the UK. Depending on where you are resident (it may not be the same country as the QROPS), the QROPS jurisdiction might also pass taxation rights onto your country of residence. This is fair as you are likely to be using government services and facilities in your country of residence.
You might want the flexibility to change the country in which you are resident and so, in transferring your pension, you may be aiming to keep your options open. The country in which your QROPS arises should, therefore, be chosen on the basis that it has numerous DTAs so that you are only taxed once and not in both the QROPS jurisdiction and your country of residence.
If you transfer your pension overseas, then you can protect from all UK taxes. This includes death benefit charges and inheritance tax.
Lastly, and this may factor as less important than which country you want to retire to, QROPS often have a wider range of investment options and trusts may offer a little more flexibility than in the UK.
