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When can I take my pension income?

Retirement benefits from a Gibraltar QROPS can be taken at any time after age 55. In the event of serious ill health or injury, you may be able to take your pension income earlier, at the discretion of the Trustees.

Can all UK registered pensions be transferred into a QROPS?

The following UK pensions cannot be transferred into a QROPS:
UK State pension entitlement
A defined benefit pension scheme that is already in payment of pension benefits
An insurance company annuity
UK civil service pensions

What are my options at retirement?

At any age after 55 you can take your pension commencement lump sum with or without income payments. The income payments can be paid out to you directly from your pension fund, or they can be used to purchase an annuity. There is no requirement to start taking income immediately, and you can decide on the frequency and amounts (subject to certain limits) of your retirement income, which can be altered or even halted at any time to suit your retirement needs.

What happens in the event of death?

A nomination of beneficiaries form will have been completed as part of the initial application form, so you will have selected a beneficiary or beneficiaries of your choice. In the event of your death a lump sum or a pension income will be paid out to your beneficiaries. There is no requirement for your beneficiary to be a financially dependent person, and you can amend your beneficiaries as often as you wish throughout your lifetime, as long as the Trustees receive your request in writing.

What is the 10 year rule?

Pension members with UK registered pension schemes have received UK tax relief on the contributions made into these schemes. Transferring these schemes into a QROPS will take the pension scheme outside the remit of the UK taxation regime, therefore in order to qualify for the substantial benefits available to QROPS, certain rules apply. The 10 year rule refers to the length of time, measured in complete UK tax years, that you have been a non-UK resident. The full benefits are available once you have lived outside the UK for this length of time. Prior to completion of the full 10 years, the taxation of a QROPS will mirror the taxation regime applicable to UK pensions.

What happens if I decide to return to the UK?

If you have transferred your UK pension into a QROPS and after having resided abroad for the full 5 years, you unexpectedly decide to return to the UK, there is no requirement to transfer your QROPS back to a UK pension scheme. There are substantial advantages in keeping your QROPS. In these circumstances your QROPS would become subject to the rules for UK registered pension schemes, but you would only be taxed on 90% of your pension income.

Will the 25% tax levy change in the Spring Budget affect my QROPS?

The 2017 Spring Budget introduced a new 25% tax on some QROPS transfers. The charge will affect qualifying recognised overseas pension schemes (QROPS) and has been introduced in an effort to prevent people from moving their pension savings overseas in order to avoid paying UK tax. However, your QROPS won’t be affected if:

Both you and your QROPS are in the European Economic Area (EEA)
You and your QROPS are based in the same country outside the EEA
The QROPS is run by your employer
Your transfer took place before the 9th March 2017.

How long does the switching process usually take?

Once you have decided that you want to switch your QROPS to Abacus, you will need to sign a Letter of Authority. This gives Abacus permission to deal directly with your current scheme provider, and saves you the hassle of dealing with them. After the Letter of Authority has been signed, it generally takes 48 hours for the switch to be approved internally. The next step would be for Abacus to receive all the relevant documentation from your current scheme and this could take anywhere from 6-10 weeks.

Is there a need for financial advice when switching my pension to Abacus?

When there are safeguarded benefits, it is compulsory to seek financial advice and as professional trustees we always recommend you seek financial advice when switching your QROPS. Pension transfer advice is highly specialised and you would benefit from advice in areas such as jurisdiction, investment options available, currency, benefit format and taxation.

What happens if I want to transfer out of the Abacus scheme?

If, for whatever reason, you aren’t happy with the service provided, you can exit the Abacus Prosperity scheme at any point. However, there will be a termination fee of £1,000 if you decide to do so.

Is there a breakdown of all the fees involved?

Yes, Abacus pride themselves on providing value to their clients and transparency on fees is integral to this. You can refer to our Fee Schedule on the “Switching Service” tab to see a complete list of our fees.

Why Abacus?

Abacus have a sold heritage as a trusted PwC member firm and over 40 years’ experience as professional trustees. We always aim to provide as much value as we can to our clients. We maintain professional relationships with many partners and have a dedicated pension’s team with a wealth of knowledge that allows us to provide a service that is second to none. We are always honest about our approach to business and with us, you will always know where you stand.

How much tax free cash can I have at retirement?

As from the age of 55 you can have up to 30% tax free lump sum if you have lived outside of the UK for 10 years by the time you retire, otherwise you can have up to 25%.

Further questions? Contact:

Erica Power

CeMap
Expert in Pension Administration
pension.services@abacus.gi
Tel: +00350 200 78777 ext 385

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Abacus Gibraltar