If you have a client who worked in the UK and now lives in Ireland, they may have a UK pension which they’d like to transfer to a qualifying recognised overseas pension scheme (QROPS).

A QROPS is a type of pension product which has been registered with His Majesty’s Revenue and Customs (HMRC) in the UK and can accept pension transfers from the UK without the potential for triggering a tax charge.

The Synergy PRSA satisfies the QROPS rules and has been registered with HMRC. You can find the QROPS Synergy PRSA application form here.

 

Why a QROPS Synergy PRSA 

Recent legislation changes mean the PRSA can now be used as a whole of life pension arrangement for your clients. This means they can save for retirement and then draw their retirement income, without the requirement to change products, simply by vesting the PRSA. 

While we’ll continue to facilitate QROPS transfers in to the Synergy BOB, the whole of life nature of the QROPS Synergy PRSA may make it a more suitable option for UK transfer options in the following areas:  

  1. Access to benefits: Typically a QROPS BOB can be retired between the ages of 55 and 70 whereas retirement benefits are normally taken from a PRSA between the ages of 60 and 75. If you retire from all employments (both PAYE employment and self-employment), you may take benefits from age 55.
  2. Residency: In addition to the age 55 requirement, for all transfers received into a QROPS after 6 April 2017, retirement benefits can only be paid if you have not been a UK tax resident for at least 10 UK tax years. This residency requirement doesn’t apply where the policy holder opts to vest a QROPS Synergy PRSA, and policy remains in place.
  3. Age limit for policy set up: There’s an upper age limit of age 70 on Synergy BOB, and age 75 on Synergy PRSA.  

 

The benefits of transferring a UK pension apply to both options:  

  • Convenience Transferring a UK pension can make sense if a client is planning to retire in Ireland especially if it’s a Defined Contribution pot. Deciding whether to transfer a Defined Benefit pension is a significant and complex decision that requires careful consideration.

    If you transfer a UK pension to an Irish pension, the transfer out will typically be paid in sterling and this will need to be exchanged to euro to set up the Irish pension policy.

    Taking retirement income in the currency of the country you live means you don’t have to worry about the effects of future fluctuations in exchange rates.
  • Tax A QROPS can accept pension transfers from the UK without the potential for triggering a tax charge.
  • Standard Fund Threshold Pension savings transferred to a QROPS in Ireland do not count towards the €2 million Standard Fund Threshold (SFT) as the SFT only takes into consideration pension savings which received tax relief from Irish Revenue.
  • Inheritance planning If the beneficiaries of your will aren’t living in the UK, leaving a pension there may be more complicated to deal with. 

You can find out more about transferring a UK Pension to Ireland here.

Talk to your business manager today about QROPS Synergy PRSA. 

 

 

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