What You Can Invest in a QROPS ?
In taking a QROPS, you will need to recognise the manner in which assets are handled by a QROPS, such as liquidation of assets prior to transferring to a QROPS, purchasing a residential property with a QROPS and the transfer of assets upon death. Here are a few things you need to know about QROPS assets transfer.
QROPS Assets – Liquidation of Assets
There are a couple of factors concerning QROPS assets transfer. Not all QROPS are the same and each one has its own conditions. When it comes to liquidation of assets prior to taking a QROPS scheme, again the same factors are in play. Each QROPS assets transfer is different from the other and it depends on the particular QROPS scheme you are taking whether you need to have your assets liquidated before taking a QROPS scheme.
- If the pension scheme you hold is either a SIPP or SSAS, then it might be possible to transfer all the existing assets to a QROPS scheme without liquidating the assets. Again this depends on the particular QROPS scheme you are taking.
- For most of the other pension schemes, you will have to liquidate your assets before you transfer to a QROPS scheme.
- Some QROPS schemes will require your assets to be liquidated before taking a QROPS and they will only transfer cash, while others are more flexible and will allow you to take a QROPS without liquidating your assets.
- Some QROPS schemes will allow you to transfer your existing pension funds “in specie” directly into the QROPS.
Purchasing a Residential Property
One of the questions that are commonly asked when taking a QROPS scheme is whether the individual can purchase a residential property with a QROPS. There are a couple of factors that determine whether you can purchase a residential property with a QROPS. Some of the factors are:
- How long you have been living outside the United Kingdom
- Have you been a UK resident any time during the last 5 tax years?
- urchasing a property is possible through an offshore company
Purchasing a property with a QROPS is possible depending on how many years you have been residing outside the United Kingdom. If you have returned to the UK and have been a UK resident any time during the last five (5) tax years then UK pension rules will apply to you and you will not be able to hold a property in the QROPS. After five (5) tax years, your QROPS pension scheme will be subject to the chosen jurisdiction. You may be able to purchase a residential property at this time; however, it will be only through an offshore company, which adds another layer of fees.
QROPS Assets Transfer upon Death
Almost all your
Some of the options that your QROPS may include are:
- An annuity to your spouse or dependants
- Payment of your proceeds to a new plan for named beneficiaries
- Retention and distribution of your plan at predefined date (within 2 years of death)
- Closing your plan and payment to your estate or named beneficiaries.