Call Us

FOR EXISTING POLICY

Have query on premium, payout or any servicing need?

Call us:

1 860 266 9966

Monday - Saturday | 10 am - 7 pm IST

Call charges apply

Dedicated NRI Helpdesk:

+91 22 6251 9966

Monday - Saturday | 10 am - 7 pm IST

Call charges apply

FOR NEW POLICY

Want to buy a new policy online?

Call us:

+91 22 6984 9300

Give missed call for a call back:

+91 11 6615 8748

Monday - Sunday | 8 am - 11 pm IST


Exclusively for NRIs:

Call us:

Give missed call for a call back:

+91 11 4473 0242

Monday – Sunday | 9 am – 9 pm IST

Language

Need assistance in choosing the right insurance plan? Get a call from our Expert.

Need assistance in choosing the right insurance plan?Get a call from our Expert.

+91 dropdown arrow

Select Plan dropdown arrow
  • Term plans
  • Saving plans
  • Wealth plans
  • Retirement plans
  • I don't know/I need help

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in. T&C apply.

What is QROPS (Qualifying Recognised Overseas Pension Scheme)? - All You Need to Know

What is QROPS

16-09-2022 |

When it relates to a UK retirement investment plan you own, you typically have two choices if you want to transfer back to India.
 

The first is to keep the pension in its current location. Then, if you already get benefits through employment or a private pension, those benefits will continue to be given to you similarly.
 

The second potential choice is to convert your UK retirement investment to a QROPS, an appropriate overseas pension scheme. Again, financial guidance should be sought before making this decision because it shouldn't be made lightly. However, transferring into a QROPS from some overseas pension scheme may provide flexibility and advantages that you may not have if the pension stayed in the UK.
 

If the second option is something that interests you, then let us look deeper into the QROPS definition, QROPS benefits, and how it works.
 

QROPS Meaning
 

Suppose you are looking to understand the QROPS meaning. In that case, the qualifying recognised overseas pension scheme, or QROPS for short, is a foreign pension plan that HMRC (HM Revenue & Customs) deems qualified to get transfers from retirement investment plans established in the United Kingdom.
 

An overseas pension scheme often needs to resemble UK-based schemes for HMRC to classify it as a QROPS pension. An instance would be preventing accessibility to pension payments until age 55, which corresponds to when pensions are typically accessible in the UK.
 

The UK Registered Pension Scheme, which enables PIOs and NRIs to obtain annuity benefits in their new place of residence, is comparable to QROPS. However, in addition to being a tax*-effective way to transfer annuity payments, it also gives individuals the freedom to select the products that best suit their needs. As a result, it is quite advantageous for people going abroad to use QROPS, which has quickly become a widely used method of transferring funds.
 

After learning the QROPS definition, let us learn a little about its benefits.
 

QROPS Benefits
 

If you are wondering if a QROPS pension transfer is a good option, here are a few QROPS benefits that may help you make up your mind.
 

  • Previously, it was required to utilise 75% of a British Pension Pod to buy an annuity that provides lifetime income guarantees. The disadvantages include reduced returns, income taxation, and the pension fund dying along with the immigrant when they pass away. However, by moving the UK retirement investments into QROPS, this problem is avoided, and in the event of death, the money that was not utilised to pay the annuitant's pension is transferred to the family's beneficiaries.

  • An NRI who has lived in the UK for five years can benefit from more flexibility in income draw-down provisions by transferring their UK retirement plan into QROPS. The Government Actuarial Department (GAD) rates determine the draw-down amount for UK pensions. Right now, these rates are relatively low.

    With QROPS, the beneficiaries can use an alternative calculation to the UK GAD due to jurisdictional rules. Additionally, UK income taxes, which typically vary from 20% to 50% according to the size of the fund, are also excluded in QROPS.

  • Many QROPS provide about 25% as a tax*-free lump payout.

  • Fund transfers to beneficiaries are typically quicker, simpler, and less burdensome with QROPS. The QROPS offers hassle-free fund transfers as well as tax* efficiency.

  • Any UK retirement funds can be combined into one fund using QROPS pension transfer for simple management. As a result, the investors can benefit from better investment options, maximise growth, and reduce overall fees. Furthermore, having a single point of contact for retirement provisions simplifies the fund administration procedure for the person.

  • Several other countries charge lower income taxes than the UK, especially on pensions. As a result, individuals may earn income from the pension plan at significantly lower rates based on where they reside. Thus, QROPS provide better yields.

  • If an immigrant is a citizen abroad and HMRC determines that the UK was the country considered the residence at the point of death, the pension will be liable to the death tax. When the UK pension amount is transferred to the recipient, a 45 per cent tax* will be assessed. With QROPS, the accrued amount can be tax*-free to the beneficiary, helping you avoid the 45% tax* amount.

    Now that we have seen some of the QROPS benefits let us also get an idea of how the transfer process takes place.
     
How to Make a QROPS Pension Transfer?
  

QROPS Pension


Knowing the QROPS's meaning and benefits is not enough when opting for an overseas pension scheme. We must also know a little about the transfer process itself. Here is how you may go about making a QROPS pension transfer. 
 

  • Speaking with a qualified pension adviser normally becomes much more crucial if considering a QROPS transfer. You might also want to consult a financial advisor in the nation where the QROPS is located. In addition, you should always seek counsel when defined benefits or specified contribution plans are being transferred.
  • Make sure the foreign scheme to which you want to transfer is an approved foreign pension scheme.
  • It must determine whether you can make a transfer. You will also need to fill out transfer forms to start the transfer procedure.
  • You will need the plan specifics and should see if authorities might be willing to approve an international transfer. However, this might not be a simple task due to the distance and linguistic constraints.
  • You must get and fill out Form APSS263 via the government website before sending it to your UK plan provider if you decide to undertake a QROPS transfer
  • While a few pension transfers are processed right away, others aren't. However, sending a pension abroad will probably take some time, so be prepared to wait.
     
Conclusion
 

Many people who go abroad to work and amass a fortune prefer to return to their roots once their work there is done and they are ready to retire. Getting money from one country to another may not always be a simple task, especially when discussing a sizable amount. However, you may want to spend your retirement comfortably and transfer your savings back to your country of origin, where you want to spend the rest of your days. In such situations, having a QROPS pension transfer plan is very helpful.
 

If you want to transfer your funds to India and are looking for the right retirement investment plan, look no further than Tata AIA Life Insurance’s retirement plans. We tailor make plans for you so that you do not need to face any difficulties in your retired life and can enjoy retirement to the fullest. All our plans are available to you online so that you can choose the best one that fits your needs. 
 

L&C/Advt/2022/Sep/2166

Get complete protection at affordable cost & tax benefits

+91 dropdown arrow
  • +93 Afghanistan

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.


 

Looking to buy a new insurance plan?

Our experts are happy to help you!

+91

Select plan
  • Term plans
  • Saving plans
  • Retirement plans
  • Wealth plans
  • I don't know/I need help

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in

People Like You Also Read

What is a Family Pension? A Complete Guide
Read More
What is Wealth Management: Meaning and Strategies | Tata AIA Blog
Read More
Wealth Insurance: The Complete Guide
Read More
5 Habits You Must Change to Create More Wealth
Read More
Tax Benefits of ELSS Funds: Save Tax & Grow Wealth | Tata AIA Blogs
Read More
Most Common FAQs on ULIP Taxation
Read More
ULIP and SIP - What Do They Mean?
Read More
What is the Difference Between Mutual Funds and ULIPs?
Read More
All about ULIP and PPF?
Read More

People Like You Also Read

What is a Family Pension? A Complete Guide
Read More
What is Wealth Management: Meaning and Strategies | Tata AIA Blog
Read More
Wealth Insurance: The Complete Guide
Read More
5 Habits You Must Change to Create More Wealth
Read More
Tax Benefits of ELSS Funds: Save Tax & Grow Wealth | Tata AIA Blogs
Read More
Most Common FAQs on ULIP Taxation
Read More
ULIP and SIP - What Do They Mean?
Read More
What is the Difference Between Mutual Funds and ULIPs?
Read More
All about ULIP and PPF?
Read More
Website Logo Image Icon

Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Frequently Asked Questions

When is QROPS a good idea?

QROPS is a good idea if you consider moving back home to India after staying in the UK for a considerable period and wish to take your retirement savings with you. 

What is an important guideline when it comes to QROPS?

When transferring money abroad, there will always be scammers who promise you many things and try to steal your money. So be careful about who you are doing business with, and always choose a trusted company like Tata AIA regarding your hard-earned money. 

Are QROPS fees fixed?

Yes, all QROPS fees are fixed, unlike fluctuating interest rates. 

Disclaimers

  • Insurance cover is available under the product.
  •  The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.