Receiving your pension via a QROPS in the UAE

An article discussing the potential benefits of QROPS for expats living in the UAE
By: Iain Farr
July 8, 2011 - PRLog -- If you are a UAE resident with a UK private pension, your pension is likely to be taxed in the UK before being paid to you in the UAE.

Simply transferring your pension into a scheme called a QROPS could mean your tax liability is reduced, even down to 0%. Where you would normally be paying between 20-50% in UK Income Tax, by choosing a QROPS hosted in a country such as Malta where pension income can be paid gross, there could be no tax deductions.

What is a QROPS?
A QROPS (Qualifying Recognised Overseas Pension Scheme) is an overseas pension scheme into which UK pensions can be transferred. Your pension will leave the UK and will instead move to one (whichever may be the most suitable) of a choice of countries. The country in which your QROPS is then located does not have to be your new country of residence, therefore as a UAE resident, you have the choice of a number of jurisdictions for your QROPS, including Gibraltar, Jersey, Malta, Switzerland, the Isle of Man and New Zealand.

The decision regarding which QROPS jurisdiction is most appropriate for you would normally depend on a number of factors, the most important of which are the tax rules in both your chosen QROPS jurisdiction, and your country of residence, and how they work together.

However, if you choose a QROPS in the UAE  , you are in the fortunate position of living in a country which may not seek to impose tax on overseas pension income. This simplifies the situation infinitely, as your main priorities are the conditions imposed by the jurisdiction you choose to locate your pension. This is where advice from expert professionals who understand your individual needs is essential.

What you will have to pay
You will need advice choosing your QROPS, from a qualified adviser. Depending on the complexities of your circumstances, and how many pensions you are collating in the one QROPS, the fees will vary. There will be a one-off, set-up fee which can range from a few hundred pounds to a few thousand. Further to this, most pension trustees will charge an annual admin fee of anywhere up to 2% of the pension value. (STM Fidecs, for example, charges just 0.25% per year.)

Further benefits of a QROPS
In addition to potentially reducing Income Tax liability, QROPS also provide you with freedom from UK taxes on death. Even as a UAE resident, if you do not move your pension scheme from the UK, there could still be charge of up to 55% on your death. If you set up a QROPS however, that money can be passed to your beneficiaries free from UK taxes.

Choosing your provider
One last important thing to remember is that circumstances change. There may be changes in QROPS legislation in different jurisdictions or changes in the UAE tax regime, and this is where your choice of QROPS provider is key, as they will need to keep you up to date with any changes which may affect your individual situation. Be sure that you have put your pension in the hands of a good provider.

By David Erhardt of STM Fidecs, a leading pensions provider, which is part of STM Group, an independent multi-jurisdictional administrator and Trustee. For further information contact David Erhardt at

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A cross border financial services provider offering innovative & impartial financial advice for high net worth individuals, cross-border investors and expats. Specialists in QROPS, international tax planning and trust and company management services.
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