Pension planning and Independent Financial Advice - talk to an expert today

Banking & Financial Pensions
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Certain subjects are intrinsically boring. Pensions planning can be one. Unfortunately, just like going to the dentist and paying your taxes, everyone needs to think about making adequate provision for their twilight years.


Now, if you are still awake, I’m going to tell you how you can make this subject a whole lot less painful and potentially, make your pension fund more lucrative. Since April 2006, individuals who left the UK and who left behind private or company pension benefits, have been able to make a QROPS transfer.
For those of you who don’t know (and for those of you who care) QROPS stands for Qualifying Recognised Overseas Pension Scheme - a scheme set up by those lovely people at HMRC, which allows non-UK residents to transfer their frozen pension outside of the UK. With me so far?


QROPS isn’t aimed solely at British nationals. If you are a foreign national who has worked in the UK and built up a pension pot there, you can also now transfer this fund elsewhere. QROPS transfers are a tax efficient way for expats to enhance their pension flexibility; moving an arrangement out of the UK, will give you a much wider choice of international investments. These may well be less restrictive in the choice of funds or permitted investments and (here’s the good bit), typically these funds do not attract the taxes that UK based funds do.


Also, investments and income payments from a QROPS can be held in the currency of choice. This will reduce the risk of currency fluctuations. Many of us have felt the sting of the pound depreciating over the last few years and a QROPS can help you manage this risk.


A QROPS will also give you the option to pass on the pension fund to your spouse, children and/or grandchildren as a pension or a tax free lump sum. This has got to be better than the marginal rate of the beneficiaries tax that most UK pension funds can be hit with. You will also be able to take a larger lump sum (30% with a QROPS - 25% in the UK) and a good QROPS scheme will give you a degree of flexibility, allowing you to vary your income in the future, rather than fixing it at one rate. This benefit has been affected by the “Flexi Access Drawdown” introduced in last year’s budget but anything over the 25% Pension Commencement Lump Sum in the UK will be taxed as income. The taxation in France can be more cost effective and beneficial. The new rules mean that any amount of pension can be drawn either as income or lump sums on an ad hoc basis.


The only real downside is that QROPS isn’t right for everyone. But, if you are no longer resident in the UK, do not intend to return there and have a pension or pensions with a minimal value of 30,000 GBP, then you should be looking into it for taking control of your pension fund.


“But”, I hear you say, “who can I trust?”


Do not fear, as always SFN is here! We’ve done the leg work and are delighted to recommend Brian Furzer. We know Brian personally and he comes recommended by many SFN members. He has also advised us (in our case NOT to take a QROPS as it would not have been right for us, advice which makes him an all round good egg in my book - how many financial advisors do you meet who don’t try to sell you something?) and is very happy to put people in touch with other satisfied clients.


So don’t just take my word for it, get in touch with Brian, get some sound, free, professional financial advice and see if QROPS is right for you.

TSG Insurance Services S.A.R.L. Siège Social: 34 Bd des Italiens, 75009 Paris

Société de Courtage d’assurances R.C.S. Paris B 447 609 108 (2003B04384)

Numéro d’immatriculation 07 025 332 - www.orias.fr

Conseiller en investissements financiers, référencé sous le numéro E002440 par ANACOFI-CIF, association agréée par l’Autorité des Marchés Financiers

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My apologies for the predictive text errors in my comment!

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Thank you to Stephen for identifying the necessity for correctlymregulated advice and I am glad that Ian is happy with his QROPS. I have come across some serious issues with regard to unregulated advice recently which could have costs clients dearly.

Mike, there are some points that require clarification with regard toyour query and I am away from my desk at the moment. If you would like to speak my French mobile numbecr is 06 25 36 30 65 and my email is brian.furzer@spectrum-ifa.com. I will be happy to spend some time clarifying and there is no cost or obligation for you.

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This is very interesting article and thank you. I do have a QROPS and would like to understand further the French Tax implications when France is the primary Country where you pay tax. I am advised that as this is the case for me, I now do not qualify for the tax free sum and if I die in France the remaining monies do not go into my Estate. Any ideas?

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Ian s comment is correct as of 3/4 years ago. The “old” QROPS was a mechanism to release your pension pot early using a legal loophole in the original 1997 UK Finance act to do so.

Of course there were companies who saw this as a business opportunity to make plenty of commission by assisting clients to complete the transaction, some at what could be perseved as extortionate. But in my experience all was explained at the time, inclusive of the cost to the pension holder, so you always had the choice although I dare say some of these companies used quite high powered sales techniques to get people to sign!

In the new finance act of 2011 the UK Government began the process of tightening up the QROPS law and in turn making it a harder choice for the pension holder to make the decision to move the pension across. This has now culminated in Mr Osborne announcing two major changes to legislation namely the availability of your total pension pot and the changes to swopping ownership of the pension on death and subsequent taxing of this, which was at 55%. This will now be at 0% or at a minimum rate depending on the situation on death of the pension holder. If these are brought through legislation then the main two selling points of the QROPS is taken away. Hence questions will have to asked at the inception of any discussion with your financial advisor whether it is worth taking a QROPS product.

There are many companies out there offering financial services here in France and across the continent and indeed the world. The most important thing for us here in France is that the person and company is registered to do so.

Referencing this discussion please view the bottom of Brian Furzers’ details. He has registration numbers with the correct bodies to offer financial advice. So before you even enter into any discussion check credentials…it’s no different from asking an artisan for his registration with the Chambre des metiers !

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I have used a QROPs scheme organised by Blevins Franks for the past 3 years and so far I am very happy with the way in which the funds have performed and how Blevins Franks have administered things.

Before going down this route I spoke to a company in the UK who were advertising QROPs in the DM or Telegraph (can't remember their name) and they came across as "cowboys" ... said to me that they could organise a transfer of my entire "pension pot" to any bank account I wanted but they wanted 10% of the total as their fee.

I would advise anyone considering QROPs to choose their advisers carefully.

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Been a "good egg" so far for us too!

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Hello,

I’d like to know, by means of this post, if other Yanks living in either France or outside France are being pestered by their banks for additional information regarding their American tax-reporting.

This is a FATCA-issue, which (it seems) Brussels implemented during the Obama Administration in which FATCA was initiated.

One must understand that the US is the only country to tax its citizens abroad. Some of us think, however, that taxation of American citizens who are permanent residents abroad is illegal. After all, FATCA was implemented in Europe without it being approved by the French parliament in Strasbourg.

Perhaps such an authorization was not needed by Brussels to implement it? But, it is possible that attacking the implementation in a EU court of law could stop it dead. Anyone also interested - or are we going to take FATCA meekly?

Yes, you can get out of FATCA by renouncing your American citizenship (presuming that you are obtaining an EU-citizenship). But, why should such an extreme option be necessary … ?

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You full name is required as a condition of membership please Tony :slight_smile:
Thanks

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OK, but show me where to go to change it please …

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Does changing my name “break” any connection to my previous posts? Does
that mean that they will be deleted - which I prefer not to happen …

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No breaks, all good, thanks!

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I appreciated reading this. I’m responding without enough knowledge, perhaps so I can get some direction and find the answers… At any rate, my impression is that FATCA perceives income earned in the US as taxable regardless of where we live, perhaps because we as US citizens, living outside the US, are not spending our income in the US. Perhaps FATCA sees this as: we’re ostensibly benefiting another country’s economy while at the same time taking our money out of the US economy. Granted, we earn it, one way or another. I’m not supporting FATCA; rather, I’m trying to figure out how to proceed. It would be great to know whom to contact for professional assistance with my plan to move from the US to live in France. I’m right with you; hope this doesn’t sound contrary. Feeling my way through this process; so, if you feel so inclined, I would appreciate learning more about your experience with this.

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>"perhaps because we as US citizens, living outside the US, are not spending our income in the US. Perhaps FATCA sees this as: we’re ostensibly benefiting another country’s economy while at the same time taking our money out of the US economy."

For some Americans living in the US and maintaining accounts abroad, yes, this seems like a good argument.

But those of us who live abroad, for the most part, actually either work abroad or are spending our American pensions abroad. So, yes, if we are benefitting from an American pension then perhaps we should be paying taxes on it? (As you would in the states.)

But for what “benefits”? Certainly not Health-care. Certainly not post-secondary education for our children.

The problem rises from the fact that many (perhaps most) of Americans living abroad actually work abroad, and so their income is not earned-income in the US. FATCA doesn’t care. Above the $100K revenue limit, you have to declare your total income, whether earned fully abroad or whether your American income was just a part of pensions also earned by working abroad.

Then there is the fact that the US is the only developed country on earth that insists that its citizens declare income to the IRS regardless of where it is earned. I’d truly like to see a Supreme Court ruling on that matter.

And maybe that is what we should be seeking instead of trying to the turn the IRS’s sentiment on the matter. (Which we know very well - they’d like to keep recuperating taxation of income earned anywhere by Americans).

The unfairness of taxing Americans working abroad is that tax-dollars are employed to fund government services of Americans in the US. For all the years I have lived abroad, and they are a great many, I have never ever had an American government service from which I have benefitted in the least.

But as a resident of France, where I earned a living and pay taxes on my income, I have had coverage from a first class National Health Care system that costs me a pittance compared to what it would cost in the US; and I sent my kids through university for one tenth the cost of a similar degree stateside. And, yes, my French taxes I paid were well worth those benefits …

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I do concur. Really helpful response, thanks.