India based QROPS Verses(V/S) OFF Shore based QROPS- Which is the best option for India based UK expats/NRI's

Many India based UK expats/NRI's who have been working as Doctors, Engineers,Teachers etc., in United Kingdom would have accumulated UK pensions. many of them do consider transferring their accumulated UK pensions to a QROPS overseas for availing many more benefits like more grwoth, tax benefits etc.,

Many of them might be wondering whether to choose India based QROPS scheme Or OFF Shore QROPS solutions.I have tried to give both merits & demerits of both Indian & OFF Shore QROPS over each other in the following two Scenerio's. So that respective client's who have accumulated UK pensions will be helped. Hope below information would be helpful for India based UK expats/NRI's who have accumulated UK pensions:

Scenario-1

Scenerio-1			Advantages of India based QROPS Over OFF Shore  QROPS
Sl No		India Based QROPS				OFF Shore QROPS
1		Emerging markets like India tend to offer better returns than those offered by developed economies & other emerging markets in the long term since the fundamentals are strong in India				Developed Economies will not produce better returns & Identifying potential emerging markets & particularly potential stocks, mutual funds & other investment options is the most challenging one for Investment Managers & financial advisers since the investment market is geographically huge.
2		The term ‘Guaranteed’ can be found only in India based QROPS. The investment portfolio is not linked to stock market & there will be no investment fluctuations & the entire fund both base transferred NHS pensions & Bonus added are safe & Guaranteed				There is no term ‘Guaranteed’ associated with the OFF Shore investments. The entire investment portfolio is linked with the capital market. The investment portfolio fluctuates as the capital market fluctuates. The investment value can go up drastically as well as down anytime. The investment risk is borne by the policy holder.
3		Regulatory protection- All the insurance companies operating in India are subjected to solvency regulations of IRDA. The minimum solvency ratio is 1.5 times of the insurers liability towards the customer. So there will be a kind of Soverign Guarantee against such risks like ‘Insolvency of Companies’. IRDA is one of the regulators like RBI who regulates banks. Both IRDA & RBI are nothing but Govt of India. So it’s a kind of Sovereign Guarantee. This kind of protection can be found only in India &no where else across Globe.				There is no such concept of ‘Solvency Margin’ protection available with OFF Shore QROPS schemes. The investments  risks is completely borne by the policy holder. In case of economic recession, there is a chance to loose the entire fund following the underperformance of the Investment portfolio.
4		On attaining age 55, the member can take upto  1/3rd of the total lumpsum & on remaining 2/3rd the member will be paid pension income till death. On member’s demise, the entire 2/3rd will be given to beneficiary as tax free lumpsum. It almost works like keeping money in a bank’s safe fixed deposit & taking interest on it in the form of pensions. The entire 2/3rd capital is safe, Guaranteed & tax free.				On attaining vesting age the Member will start getting pension income. The pension rate is fixed based on  Member’s age & UK GAD table. Based on Member’s age & UK GAD table a percentage is fixed stating how much a member can start taking out every year from the accumulated pension Corpus. It’s called drawdown pensions. As member starts drawing pensions out of the corpus, the size of the corpus keeps reducing every year & at the same time the remaining corpus gets invested. Once again investments can go up as well as down. So on member’s demise it is difficult to say, what corpus is left for family. It may be higher than India based QROPS or lesser than that also. Or sometimes with no funds also to pass to family.
5		Easy & comfortable access to policy details like, you can walk into nearest branch office, meet financial consultant in person, since the office branches located in your base resident country.				Comparatively not so comfortable to access your policy details since the concerned offices located in different parts of the world. Also OFF Shore QROPS structure is totally different from India based QROPS. With OFF Shore we need to choose a Trustee (like Sovereign), Custodian insurance company (like Skandia) & QROPS jurisdiction as well as Investment fund houses. So that to get policy details, we need to contact all of the above separately. Where as in India, you need to call just ‘One Point of Service’, for example like ING, LIC etc. There is no such confusions.
6		Majority investments are done in Bond instruments like Govt Securities & AAA rated funds. In India Bonds interest rates are comparatively higher than any other emerging economies. Even Savings banks interest rates in India is more than 3.5% p.a. So that your investments value can only go up & less prone to down turn movement.				Eventhough you got the option of investing in Bonds & Debt instruments there Is no term ‘Guaranteed ‘component associated with the instruments. OFF Shore Bonds will give their stated returns subject to solvency of the issuer bank/company for the stated Bond/Debt maturity term. That means investments in Structured products also carries the same level of risks as if you have chosen to invest in equity based investment products. Moreover, returns with OFF Shore bonds are not beyond 6%.

Added to all the above points, now the very positive development with the Indian political history is, India got the most stable central Govt in the last parliament election-2014 with absolute majority. Since last 30 years, India Govt’s have been running with Coalition due to which the former Govt’s often face many hurdles to bring pro-growth legislations as for as economic issues are concerned. The coalition Govt’s has been forced to protect certain vested interests of different regional political parties. Now the present stable Govt can bring Pro-Growth legislations that will boost the economy. Stock  Market boom is just the reflection of the same. Since fundamentals are strong in India, we expect growth of the economy in the long term.

Scenario-2

Scenerio-2			Advantages of OFF Shore QROPS Over India based QROPS
Sl No		India Based QROPS				OFF Shore QROPS
1		Basically designed for Indian residents & don't suit OCI's as they are Global people				Designed for a more transient population & International advisers are more familiar with them.
2		Investments are held in INR & Investment value is not as much stable before major curr -encies due to heavy INR fluctuations				You can invest in assets in most currencies & can choose to receive payments in your local currency. Major currencies like GBP,USD, EURO are more stable with less fluctuations. So the investment value remains stable.
3		Most India based QROPS allow you to withdraw a  lumpsum of upto 33% of the pension fund on retirement.				In most of the OFF Shore QROPS you can withdraw the entire pension fund except for the 70% of the value transferred from depending on the local rules.
4		Usually offers India based  investments. So returns on investments are moderate				Can offer a wide choice of investments, including share,mutual funds & packaged investment products across the Globe.
5		India based schemes often have complex charging structu res.So its hard to tell whether you are getting value for your money.				Comparitively cost is less & remains uniform through out the term.
6		Once transfer is done to a India based QROPS, the fund gets locked & can't move your pensions to any other alternat ive scheme later if required.				You can take away your pension fund wherever you go &  wherever you want
7		You will not be known exact ivestment details & Investmen t managers.				Expert investment Managers will use their expertise in identifying the emerging markets & potential stocks, Mutual Funds, & other best investment options that can deliver excellent returns. You will be known where exactly your corpus gets invested.

Who am I? 

Let me introduce myself. I am Ravi kumar I have been working as a Financial Advisor for more than 5 years. I have been instrumental in transferring pensions for relatively good number of doctors & other professionals who have relocated from UK to India & other jurisdictions overseas. I promise to offer quality service & my service covers existing Pensions review, Free QROPS Consultations & Guide, Transfer Recommendation Report and much more.

Please contact me for an informal chat about the transfer scheme with my following Contact details.

Mr Ravi Kumar. Financial Consultant (Code: 60272381), Exide Life Insurance Co Ltd.

Branch- B 21, # 28, 6th floor, Centenary building, M.G Road, Bangalore-560 001.
Cell:     +91 9844519872, +91 9980927393
Email:  ravi.sampige@gmail.com

OFF Shore QROPS- The best solution for India based UK expats/NRI’s

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 1^st 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.

http://www.financemalta.org/fileprovider.aspx?fileId=1614686

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

Email:  ravi.sampige@gmail.com

Member’s who applied to get their NHS pensions transferred to a QROPS based in India , Australia etc., and got their transfer applications rejected, can now get their pensions transferred to an alternative QROPS in Malta, Gibraltar etc., before the deadline of 31st, January 2016.

NHS Pensions  has refused to allow  transferring pensions to QROPS in India & QROPS in Australia  for many reasons. For example, NHS refused to transfer pensions to many Australian QROPS, since those schemes were being de-listed from HMRC’s QROPS list as those schemes are no longer meeting new HMRC’s conditions i.e, effective from 6^th, April 2015. NHS also refusing to allow transferring pensions to QROPS in India despite the schemes are still being listed on HMRC’s website as a Recognised Overseas Pension Scheme (‘ROPS’) as  NHS interprets  rules of these schemes are also as not in line with new HMRC’s conditions that is effective from 6^th, April 2015.

Member’s had  applied to transfer their NHS pensions to QROPS in India, Australia etc., in good faith, as it was their understanding that the schemes met all the relevant conditions of a ‘ROPS’, including the pension benefit age test. However, if NHS interpretation of these rules are different, Or applied schemes got de-listed all of a sudden, then member’s  must be permitted to make arrangements to transfer their pensions to an alternative scheme which is acceptable to the NHS.

There is a good news for those aggrieved clients who desperately wants to transfer their NHS pensions to QROPS overseas. The department of health(UK) has recently agreed that members who had returned their fully completed option forms prior to the 6^th, April 2015 and subsequently had their chosen scheme removed from the list(also refused to allow transferring pensions to QROPS despite the schemes are still being listed on HMRC’s website as ‘ROPS’ as in the case of QROPS in India)can now select a scheme that meets all of the current legislative requirements of a ROPS as set out by the HMRC, including the new ‘Pension Benefit Age Test’ alternatively and get their pensions transferred .

But here is a catch. Those who wish to transfer their NHS Pension to an alternative scheme, they need  to put request before NHS immediately via email & and they need to  fill required forms  which is sent by NHS . The fully completed required forms need to be returned to NHS via the post before the 31^st January 2016. NHS has set deadline of 31^st , January 2016 to return fully completed forms.

The Centaurus Retirement Benefit Scheme, based in Malta (hereinafter referred to as the ‘Centaurus Scheme’) meets all of the current legislative requirements of a ROPS as set out by the HMRC, including the new ‘Pension Benefit Age Test’, and also that NHS has recently permitted transfers out to this scheme.

For One’s information Centaurus Scheme is also a defined contribution scheme, and that pursuant to the Pensions Act 2015, transfers from unfunded public sector schemes are restricted, except to other defined benefit schemes. However, since Member’s records shows  that the full set of pension transfer documents, as required by NHS, were submitted to the NHS in good time to meet the April 6 2015 deadline, and therefore there is no reason that this transfer to the Centaurus Scheme should not proceed.

Those member’s who applied to get their NHS pensions transferred to a QROPS based in India , Australia etc.,  and got their transfer applications rejected, can now get their pensions transferred to a QROPS in Malta, Gibraltar etc., before the deadline of 31^st, January 2016.

FOR MORE DETAILS & STARTING UP OF THE TRANSFER PROCESS CONTACT:

Ravi Kumar

Financial Consultant

ALEXANDER PETER WEALTH MANAGEMENT

M +91  9844519872,  +91  9980927393

Email:  qropstoindia@gmail.com

http://www.alexanderpeter.com/

PERSONAL FINANCIAL PLANNING

Before making investment plans,one shall make sure  that the following 7 essentials have taken care.

.

1)Adequate life insurance cover: 15*annual expenditure(annual income)+net liabilities

 One shall protect his family against the twists and turns by taking a basic life cover that is equal to15times of one’s annual expenditure+net liabilities

2)Medical cover: Adequate cover according to age & health. 

One shall be prepared for any exigencies by taking adequate medical insurance cover,keeping in mind health &age

3)Adequate cash at home:  1month expense

    Inevitable expenses always walk in uninvited! One shall       tide over these hurdles by always keeping hard cash equal to one month’s home expenses

 4)Adequate balance in savings account: 1months expense

   One shall work through this difficult month by always maintaining one months expense balance in savings account

5)Widley accpected credit card: Anytime 365*24*7

   One shall be prepared for unforeseen situations by having a credit card in hand.

 6)Emergency reserve:6-12months expenses

   One shall be prepared for any eventuality by putting away 6-12months expenses in bank account or openended mutual funds.

 7)Will: One shall ready with it

   Lack of a will could cause confusion for one’s

  Family.One shall be smart by drawing up a will.