Tuesday, 30 October 2012

New Zealand QROPS

QROPS Week – Day 2

Qualifying Recognised Overseas Pension Schemes (QROPS) have to be approved by the UK Tax Authorities (HMRC) in order to receive transfers from UK Pension Schemes or Plans

There are many previous references to NZ QROPS here at Financial Pages in Spain, but this is a complete update.

New Zealand, as a jurisdiction is very credible with strong links to the UK. NZ was one of the first jurisdictions to offer QROPS after their inception in 2006. NZ is now a leader in offering flexible benefits.

Key Factors

·       Pension Commencement Lump Sum (PCLS) of 30% is allowed

·       70% of the fund is used to provide retirement income in line with UK requirements

·       100% cashouts of funds is NOT allowed and advertisers who suggest otherwise are scammers (beware)

·       Income is more flexible AFTER 5 years of UK non-residency and is paid gross, importantly it is NOT determined by UK annuity rates.

·       Benefits can be taken at age 55

Fund Investment

·       Investment through a bond is allowed (e.g Prudential, Aviva etc)

·       The range of investments is wide but excludes residential property


·       All QROPS schemes are fully regulated by NZ Financial Services Commission

·       NZ is acceptable to UK HMRC due to the existence of a Double Taxation Treaty

·       New Zealand has very many Double Taxation arrangements, including importantly for expats, most of Europe, USA, Canada and South Africa

·       NZ Residents and Non-Residents are treated equally for tax purposes, so the scheme passes the ‘fairness’ test


·       There is a good choice of New Zealand QROPS providers which helps to make fees competitive


·       ‘Financial Pages in Spain’ will only recommend fully regulated advisers whose services and qualifications have been checked. Selecting the correct QROPS jurisdiction is a key element in the role of an adviser and even if NZ is the preferred more than one supplier should be considered

·       ‘Know your client’ and ‘Treating Customers Fairly’ are key to good advice. I will recommend an appropriate Adviser if you email me some brief details

David Goodall
Financial Pages in Spain