QROPS (qualifying recognised overseas pension scheme)
The independent vested benefits foundation is registered with the UK tax authorities as a qualifying recognised overseas pension scheme (QROPS) and UK pension assets can be transferred into it tax-free. Dennis Volkart, our QROPS specialist, answers frequently asked questions about QROPS Switzerland. There are also other forms of pension assets in the UK that we can accept too.
Tax-free transfer of your UK pension assets
Independent is the only vested benefits foundation in Switzerland with QROPS status and can receive UK pension assets tax-free. If a pension fund member leaves the UK, the UK pension assets can be transferred to the independent vested benefits foundation free of tax if certain conditions are met.
Threshold for tax-free transfers
Any transfer of assets abroad from a UK-registered pension fund is subject to special tax treatment. The British government has announced changes to the threshold for tax-free capital transfers. We would be happy to provide you with further details in a personal meeting.
The following conditions apply:
- The person must be resident in Switzerland.
- The person must be at least 55 years old at the time of transfer.
- The pension assets being transferred should amount to at least CHF 100'000.–.
Is the tax-free transfer worthwhile?
Withdrawals of pension assets in Switzerland are taxed preferentially at tax rates well below those in the UK. For this reason, the transfer is worthwhile for tax reasons alone. But the question of currency is also important. If you are planning to spend your later years in Switzerland, it makes sense for you to consolidate your pension assets in Switzerland and have them managed by a Swiss pension foundation.
PensExpert handled the transfer of my pension assets from the UK to Switzerland extremely quickly and professionally. Thanks to their expertise, I was able to consolidate my funds without any problems and structure my retirement provision optimally. The entire process was efficient and transparent – I can recommend PensExpert without any reservations!
A.G
Former investment banker
Advantages
- Your UK pension assets can be transferred tax-free
- No wealth or income taxes in Switzerland on vested benefits assets
- Withdrawal of vested benefits is taxed at a preferential rate
- UK pension funds invest predominantly in British pounds
- This creates a currency risk if living expenses have to be financed outside the UK
- Personal and customised investment strategy, subject to the legal restrictions
- Full transparency in performance and costs
- Securities can be transferred into private assets on withdrawal of pension assets
FAQs
Yes. After the transfer, these pension fund assets are subject to the investment guidelines for occupational pensions and independent’s investment regulations. At independent, the foreign currency weighting may not exceed 100%, while the equity weighting can be 100%.
The transfer process is complex and time-consuming for the vested benefits foundation. There is also a ten-year reporting obligation to the UK tax authorities. Independent charges a one-off consulting and processing fee for its services.
If the pension fund member wishes to emigrate back to the UK after the withdrawal, this is only possible if they have been out of the UK for at least 10 years. Furthermore, the former UK pension assets must be held with independent for at least five years after the transfer before they can be paid out.
A transfer to independent is worthwhile for tax and currency reasons. However, due to the numerous regulations and the complex process, every customer’s situation needs to be checked and assessed individually before a transfer is made.
