Friday, 10 September 2010

QROPS Week - Day five

This is QROPS Week, on Financial Pages in Spain. An article has appeared here daily dealing with different aspects of QROPS. Day five today is the final day and deals with various QROPS issues.

Avoid Long term lock-ins
Times change, investment conditions change and an individual investment group may not always be as good as you first thought. This suggests that you need flexibility to change as circumstances change.

There is one company which locks you in for 10 years with very high penalty charges if you want to get out! But at least it guarantees not only their initial commission but the trail commission for at least 10 years. For an alternative adviser please email me

Access to Cash
The question of New Zealand QROPS has already been mentioned this week. It should also be noted that since Pensions Simplification in April 2006, the vast majority of schemes can pay, in the UK, 25% of the fund as tax free cash. This is an important option which should be borne in mind.

In-Specie transfers
I recently had a conversation with an English guy now living and working in Spain who was telling me about his Self Invested Personal Pension (SIPP). Naturally, I asked if he had considered transferring to a QROPS. He told me that he was very happy with the investment returns in his SIPP and that his ‘adviser’ had told him that it wasn’t possible to transfer the assets in his SIPP to QROPS!


Such a transfer is possible and is known as an In-Specie transfer, this is perfectly possible and clearly good advice where the individual is pleased with his investment performance. He has ditched the ‘adviser’ and only the possibility of a return to the UK is holding up his in-specie transfer. Please don’t get the wrong ‘adviser’ email me

Why not Spain?
Spain does not recognise a trust structure, which is necessary to accept a UK pension. Therefore any potential transfer to a QROPS by a Spanish resident would take assets currently in held in trust, out of trust, with negative taxation consequences.

It is much better for Spanish residents to have the capital sums outside Spain in a trust and then for any income to be taken and declared in Spain. By declaring that the income is an annuity, which Spanish law recognises, favourable tax treatment is given, even though an annuity need not be bought from a pension provider.

Which is the best QROPS jurisdiction?
The only honest answer is that it depends on personal circumstances and can also be determined by an individuals own preferences. I can say that for Spanish residents the worst jurisdiction would be Spain!

By being open and frank with an authorised and regulated adviser, a plan can emerge which has to be in the individuals best interests. If you email me, please give me a brief outline of your circumstances and what your immediate objectives might be. I will ensure that you get authorised and regulated advice. If you live in Spain and are considering a Pension Transfer (including QROPS), the adviser that I recommend will regulated by one or more of the following;

Comision Nacional del Mercado del Valores is the principal financial services regulator in Spain and responsible for authorising investment products.

Direccion General de Seguros y Fondos de Pensions is the Spanish regulator for insurance products which can be marketed in Spain.

The Financial Services Authority - the UK's financial services regulator.

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Feedback please!
If you have your own question, I’d be delighted to answer it. Those of you who live in Spain or intend to live in Spain should be very careful when choosing an adviser. Any adviser can advertise on the internet or in a newspaper but that does not guarantee that they are properly authorised and regulated.

You can write to me with your personal experiences or to be put in touch with my recommended adviser by sending me an email