As for as OFF Shore QROPS is concerned ,the
best solution for a resident of India Or India based UK expats , who have accumulated UK pensions , is
a QROPS based in Gibraltar & Malta. Below is the perfect reasons
why India based UK expats/NRI’s should choose Gbraltar OR Malta as their QROPS jurisdictions over
others:
Gibraltar:
An offshore QROPS in Gibraltar will
continue to grow tax free. Gibraltar has been given UK HMRC approval in writing
and income tax would be only 2.5%. If client is non-resident or has not been
resident for 9 out of last 10 years from India, there will be no tax to pay in
India. A lump sum of 30% can be taken at 55 and the plan can be valued in any
major currency.
A QROPS is far more tax efficient than UK pension if
resident in India. Tax liability with UK scheme will be 20%. Tax liability
with QROPS in Gibraltar is only 2.5%. Also on death with a UK scheme
the corpus is liable for a 55% tax charge. With a QROPS there is no
tax on death.
Please remember that we would use a QROPS in
Gibraltar/Malta for tax reasons but we would have an insurance company on the
Isle of Man hold the corpus for protection reasons.
Malta:
In addition in Malta you can access lump sum and
income at age 55 as long as client has been out of UK for 5 years..
On transfer to a Malta
based scheme you will be able to withdraw an amount of 30% as capital from
Malta at 55. After 3 years a further capital sum could be
taken via a process called “Programmed Withdrawals”. After the 30% drawdown at age 55, after
3 years further capital can be taken every year. This is in excess to the
annual GAD which can be taken every year from age 55. This can be taken in
advance. Therefore at age 55 around 35% can be taken (capital plus annual GAD
on 1st day).
Malta relies on its double taxation agreement with India which
has just changed. Earlier Tax used to be chargeable in Malta for pension income
for Indian residents. Now however this has changed.
India / Malta DTA amendment attached showing the changes. Articles
18 (pensions) and 22 (other income) both now show only taxable in India.
i.e- no tax in Malta, so income will be
paid without deduction of tax and then it is down to the individual to declare
the income If they want & moreover its all depends on where the client is
tax resident.
Both Gibraltar & Malta will be
appropriate wherever resident in the world and continue to provide tax free
growth and low tax income. On death the full corpus is transferred to clients
spouse or other beneficiary. For any client who holds a UK pension the
following is true. On insolvency of the underlying insurance company that hold
his UK pension then the FSCS cover him for up to £50,000.
For any QROPS (Gibraltar/Malta)
one can use insurance company based on
the Isle of Man (Crown Dependency of the UK). These are all the offshore division
of UK insurance companies, such as Friends Provident International, Skandia,
Royal London etc. Many use the Isle of Man for a number of reasons, first being
that there is no tax on growth but secondly the Isle of Man has a investor
protection scheme that covers individual investors pension corpus up to 90% of
their investment with no upper limit. Therefore the protection available is
greater.
Pension rates are 20% higher with QROPS,
as QROPS just use a greater calculation of the UK GAD limit. This is
the same with Malta & Gibraltar.
FOR MORE DETAILS & STARTING UP OF
THE TRANSFER PROCESS CONTACT:
Ravi Kumar
Financial Consultant
QROPS Advisor Group
M +91 9844519872,
+91 9980927393
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