Monday, 30 May 2011

QROPS - Questions and Answers

Financial Pages in Spain – Readers Favourites Week

Day one

Updated with readers questions

·        Is there a minimum amount for QROPS?
·        Explaining New Zealand QROPS 
·        You can move your UK pension assets to QROPS
·        Who can advise me?

 Qualifying Recognised Overseas Pension Schemes (QROPS) were introduced in April 2006, by the UK Government, as part of a process called Pensions Simplification.

In this ‘Question and Answer’ format should be the main issues for those of you who live in Spain or indeed those who intend to live in Spain. Individual queries can be sent by email

What’s the minimum amount I can transfer into a QROPS?
Some advisers regard sums of under £100,000 as ‘small pots’ not worth transferring. However, with extremely low annuity rates and poor rates under the GAD rules, readers, with less than £100,000 to be transferred, need and deserve advice. New Zealand QROPS, which I have dealt with, are certainly worth readers looking at. Let me recommend an adviser, click here. If your adviser says your fund is too small – seek a new adviser!

Is the New Zealand Foreign Trust (NZFT) a QROPS?
Strictly speaking, NZFT is not a QROPS but it is an investment option for the cash from a New Zealand QROPS. The NZFT has very favourable Trust arrangements, a very liberal view of what can be invested, including property, together with no rules on levels of income. As it is a specialist facility, please let me introduce you to an appropriate adviser by emailing me. You need to be UK non-resident for five full and complete tax years to qualify.

Is the transfer into a QROPS expensive?
The main cost associated with a QROPS is the preliminary registered scheme
transfer work that is required before your pension assets can pass into a QROPS. This is specialist work and I’ve never thought cheapest is best in professional advice. However, it must be reasonable. A really good financial adviser, who is properly authorised and regulated, will put the costs in writing, before expecting you to sign up to their scheme. I’m happy to recommend such an adviser if you contact me here. Please be aware that some advisers  don’t tell you the costs in an open and unambiguous way. Always seek clarification.

As part of my ‘second opinion’ option, if you have a report which is unclear, send it to me and I will give my thoughts.

I’m happy with the investment in my SIPP, why can’t I transfer it to QROPS?
If an adviser indicates that you cannot transfer your existing pension investment to QROPS they are wrong. This type of transfer is known as an ‘In-Specie transfer’. It is acceptable in QROPS because to meet the rules in the UK the investment has to be approved. If the investment is acceptable in  UK pension funds then it is perfectly satisfactory in QROPS.

Some advisers have difficulty in distinguishing between their own business model and the rules! To avoid such advisers, please email me

What can I invest my QROPS assets in?
There is a flexible choice open to you and part of a good adviser’s process is to determine and agree an investment strategy which closely matches your needs. Your attitude to investment risk is also key, since it will indicate the asset classes that you should use and those to avoid.

Will any benefits I take from QROPS be taxed?
QROPS income is generally not taxed at source. The tax treatment of what you receive is very favourably treated in Spain, though you need individual advice to explain how it affects you.

What will happen to my QROPS when I die?
Any funds remaining when you die will either be paid to those nominated by you as beneficiaries or those same beneficiaries may simply continue deriving the same tax free advantages you were enjoying in your lifetime.

Are there any circumstances in which I shouldn’t transfer to a QROPS?
If you want the certainty of income and are prepared to hand over your fund to a pension provider, then an annuity might suit you better than QROPS. I would not suggest you to transfer to QROPS if you intend to be expatriate for less than six years, but you need advice from an authorised and regulated adviser.

I’ve heard about unscrupulous QROPS providers and intermediaries, any
In May 2008, Her Majesty’s Revenue and Customs (HMRC) withdrew status from all Singapore based QROPS. Despite an appeal by a Singapore Trustee, the actions of HMRC have been upheld in the UK Courts.This action emphasises the importance of taking independent advice from industry experts who are in regular contact with HMRC to ensure that any transfers do not nor are likely to fall foul of HMRC regulations. The best advisers can also offer a choice of QROPS based in more than one jurisdiction. Ask to be introduced

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!

If the pension value is quite modest and you have been UK non-resident for more than five full and complete tax years, then New Zealand is a credible jurisdiction. Under these circumstances you have the option to encash your pension plan.

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.

If you would like a copy of my QROPS Factsheet please request a copy by email

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If you have a further 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. You can write to me with your personal experiences or to be put in touch with a recommended adviser Email me here

For most people, a pension fund is their second biggest asset. Do not get involved with unauthorised and unscrupulous ‘advisers’.


Friday, 27 May 2011

Financial Pages in Spain – Readers Favourites

Readers’ Favourites Week

This Blog has now been going for 10 months and there have been 96 posts. In that time the readers, in Spain and far beyond, have shown those subjects which interest them most. It wasn’t determined by wealthy advertisers or corporate nobodies with cheque books, it was decided by YOU the readers.

Week commencing Monday May 30th 2011 will be Readers Week at Financial Pages in Spain. The five subjects covered will be the readers’ favourites.

  • Pension Reciprocation Plan

  • New Zealand QROPS

  • QNUPS (Qualifying Non-UK Pension Schemes)

  • Spanish Inheritance Tax (ISD)

  • QROPS Questions and Answers

There are other issues that I would have chosen but unlike the arrogant big company guys, I’m prepared to back the readers. I might slip in a daily link too!

There is much detail on the Blog but if you need to contact me, please send me an email . I always try to respond quickly.

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Have you seen the new service from Financial Pages in Spain? La Torre Fx – Foreign Exchange gives you the opportunity to compare your usual suppler of foreign exchange and choose the best. La Torre Fx does not make exaggerated claims of always being the best, but often will be. Check here

Saturday, 21 May 2011

EU Furnished Holiday Let – UK Tax Saving

I was discussing this scheme with a professional connection of mine, who is a UK Chartered Tax Adviser. I asked the question ‘With the Treasury looking for all the savings they can, why hasn’t this scheme been abolished?’

The reply was incredible!

‘So few people claim the allowance (one-off capital allowance) that abolition would cause more trouble than its worth’

Please tell, why aren’t you claiming a benefit to which you are entitled?

This article is for the benefit of UK Taxpayers with furnished holiday let property anywhere in the EU including Spain. Most cases, to date, have been in Spain.

In summary, to benefit you need to answer ‘yes’ to the following four criteria;

  • Is the owner a UK taxpayer?
  • Was the purchase price in excess of £150,000?
  • Is the property a furnished holiday let in the UK or any part of the EU?
  • Is the property let out for more than 70 days a year and available for letting more than 140 days per annum?

Anyone who can answer ‘yes’ to all of these questions may be able to save thousands of pounds in future tax or rebate. Start the ‘ball rolling’ by sending me brief details by email

The Tax Office (HMRC) of course does not advertise that the entitlement is available but every person who qualifies will almost certainly have overpaid tax. It has been estimated that under 2% of UK taxpayers who own furnished holiday let property have made a claim. So, Holiday let owners, 98% of you have a claim to make! But it has to be a very detailed, pre-determined report in the form of a survey.

This benefit is given as either a tax rebate or often a reduction in future tax payable, but normally the latter.

Whilst accountants will do everything possible to claim benefits for their clients, this is a specialist field. The promoters, who provide access to this entitlement, must conduct a very rigorous survey of the property, to standards set by HMRC and presented in a specified format. As the work involved is so detailed and time consuming, you must not just answer the questions above as ‘yes’, there is another filter where the company will discuss by phone or in person, the finest detail to ensure compliance.

Because of this diligence and expertise the company has a 100% success record on cases submitted to HMRC. If you feel you meet the criteria, please email details to me, which will be in total confidence.

The following step by step guide shows how the scheme works and where you fit into it.

There are five steps;

  1. There is a telephone or face to face meeting with the scheme provider to establish that a claim would be valid. So much detail at this step can save lots of time in the process.
  2. The property is surveyed, in great detail, taking lots of photographs (the record number is 400) as these form part of the HMRC method and standards required.
  3. The claim will include hundreds of items within the ‘intrinsic fabric’ of the property, for everything, including the kitchen sink!
  4. The norm is to find capital allowances equivalent to 25% of the property value which can then form part of the claim
  5. When the allowances are calculated and identified in the HMRC format, a Report is completed within a two week time-frame. This is sent to the UK taxpaying property owner for approval before the claim is made to HMRC.

My apologies, there is one step I have forgotten. Before step 1. above please send me details of your circumstances and potential claim.  This means that I can put you in touch with the company promoting the scheme, without delay. Send your details to me by email .

In line with the ‘Comprehensive Spending Review’ make sure that you get your claim made before the Government decides to scrap thhe allowance.

Monday, 16 May 2011

Getting a ‘second opinion’

In the medical professional a ‘second opinion’ is often expected, and frequently requested by the client. I am finding from examples sent to me that it is also needed where financial advice is involved. Please feel free to send me examples or to get a second opinion.

The following statements came from readers of Financial Pages in Spain when asking for a second opinion or their comments about a particular organisation;

  • ‘It  looked like a mass produced report with just my name and personal details changed’

  • ‘They wanted an up front fee even to talk to me. Strange as they never mentioned it in their adverts’

  • ‘I wasn’t convinced the advice was correct’ (when I checked it, it was inaccurate)

On closer investigation many of the problems are related to poor advice on the transfer of UK pensions to QROPS. Whilst QROPS is a great opportunity and suits many expats, too many so-called advisers see it as a ‘cash cow’.

  • Never deal with unauthorised and unqualified advisers

  • Don’t pay up front fees

  • If they won’t disclose commissions don’t deal with them

  • Get referred to an authorised and qualified adviser by sending me an email

Can you help me to help you?

  • Please send me both good and bad examples of reports you have received, from financial advisers, I’ll respect your privacy

  • Tell me the names of Advisers who refuse to disclose commissions

  • If the fees, charges and commissions are hidden in a report and not openly disclosed, please send examples

This sort of information will help everyone and help eradicate some of the greedy and unprofessional practices.

I may not have intended it when I started out but it seems that Financial Pages in Spain is becoming the respected second opinion.

You may also benefit from checking my post on ‘Professional Connections’.

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Whatever your query, please write to me. My email is on this link