QROPS Pension Transfer advisor for Waterstone Investment Associates
Since 2006 UK non residents have been able to transfer their UK pensions to a jurisdiction of their choice. Affording them reduced tax rates, higher returns, higher pension income, and many other benefits. However this has not been the case for US residents. To a great degree this has been due to the Patriot Act. George W Bush’s legislation to help fight the war on terrorism criticised at the time for ignoring civil liberty concerns. This has had a profound impact in how a US resident can conduct their financial affairs.
The effect of this legislation has stopped US residents transferring their UK pensions to a QROPS. If you consult the current HMRC list of registered QROPS providers, you find fourteen listed in the USA. The majority of which are 401k pension plans. However the IRS has indefinitely blocked transfers to these schemes. And things will not get better. The HIRE act comes into force in the USA 1st Jan 2013.
Included in this is The Foreign Account Tax Compliance Act. This legislation will stop most long established QROPS Trusts taking on US Nationals outside the USA, and also expats of any nationality resident in the USA.
What was required was to construct QROPS trusts specifically with US residents in mind. Some QROPS providers realised that they were missing out on a vast potential market, and have built QROPS trusts from the ground up that are IRS friendly. These QROPS trusts are based outside of the USA and were put together in consultation with the IRS. Allowing them to comply with all current regulation and reporting. Importantly they also comply with the proposed Foreign Account Tax Compliance Act.
As a company we have worked closely with QROPS providers and investment vehicle providers enabling us to offer USA residents IRS compliant QROPS transfers at a low cost. A QROPS transfer undoubtedly is of great benefit to anyone who is eligible to do so. Particularly given the latest wave of pension reforms proposed by the UK coalition government. Which include measures to allow Final Salary (Defined Benefit) pension scheme trustees, to reduce transfer values at their discretion? Given this you seriously need to consider taking action sooner rather than later. Take the first step to financial freedom, contact us now for Free no obligation advice on your UK pensions.
Please note that the minimum transfer value to a QROPS by a USA resident is £52,000.