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QROPS: Transferring Your UK Pension to India

The Qualifying Recognized Overseas Pension Scheme (QROPS) is an overseas-based pension scheme available in financial centers outside the UK. It offers more investment opportunities and tax advantages than traditional schemes.

One of the most popular reasons why Non-Resident Indians (NRIs) transfer pensions from the UK to India is because transferring pension funds accumulated in a developed economy like the UK can be done through QROPS and it becomes more tax efficient.

What Are the Benefits of QROPS?

Flexibility and Control

Unlike the old UK pensions, QROPS provides flexibility in how you access your fund, leading to more income and avoiding compulsory annuities.
Tax Efficiency

QROPS can provide you with the opportunity to pay less tax on your income and withdrawals than UK pensions, depending on which country the holder lives in.
Inheritance Planning

QROPS can help protect your pension from UK inheritance tax, allowing you to pass on more wealth to your beneficiaries.
Consolidation

More than one UK pension can be combined into the same QROPS, making them easier to manage and potentially more cost-effective.

Tata AIA Retirement Solutions for QROPS

There are 4 top pension schemes available at Tata AIA, which are registered as QROPS with HMRC. They are:

Tata AIA

Saral Pension Plan

Key benefits:

7.04%^& guaranteed^ annuity rate
Get income tax^~ benefit as per applicable tax laws
100% returns of Purchase price^%

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Tata AIA

Fortune Guarantee Pension

Key benefits:

Get guaranteed* regular income to secure retirement. T&C apply*
Add your spouse under the same plan
Get tax benefits^~ as per applicable tax laws

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Types of QROPS Fees
- Annual Charges: Current charges for the management of the scheme.
- Initial Transfer Fees: Fees charged when funds are transferred into the QROPS.
- Investment Fees:These charges are for the investments that are in the scheme.
- Advisory Fee: Fees for professional advice about financial services.

Tax Implications

The UK Pension Company deducts a 25% fee as an Overseas Transfer Charge in case the person living outside India initiates the transfer. However, if the person within 5 UK tax years settles in India post-transfer, this amount becomes eligible for a refund from HM Revenue and Customs (HMRC). Conversely, exemption from the 25% charge is also available under the following situations:

1.At the time of transfer, both the individual and QROPS must be in India.

2.QROPS must be in a country within the European Economic Area (EEA).

3.The QROPS is provided by the employer and has an occupational pension.

Eligibility Criteria

The eligibility criteria for QROPs are easy to meet. Here’s what it looks like:

You must be an overseas resident with a built-up pension fund under a pension scheme registered within the UK.
You can either be an NRI/OCI/PIO with Indian residency status from the UK or an Indian resident having a pension fund in the UK.

The Transfer Process

It usually takes from 5-8 weeks to transfer your UK pension over to a Qualified Recognized Overseas Pension Scheme (QROPS). Timelines, however, can depend on how quickly your current pension provider responds. Here's a general overview:

Your involvement begins when you speak to a financial advisor.
The adviser asks you to give your consent for him or her to liaise with your existing pension provider.
Your pension provider is contacted to confirm the details of your funds and establish whether they can be transferred.
You agree to QROPS jurisdiction and all relevant forms completed by your advisor.
Subject to approval, your pension moves across into the chosen QROPS, where you then have alternative investment selections.

Frequently Asked Questions

How long does it typically take to transfer a UK pension to a QROPS?

The transfer process usually takes 5-8 weeks. However, the exact timeline can vary depending on the cooperation of your existing pension provider.

What is the first step in transferring my UK pension to a QROPS?

The initial step involves contacting a financial advisor to initiate the transfer process.

Do I need to provide any authorization for the transfer?

Yes, you will need to grant your financial advisor the authority to communicate with your current pension provider on your behalf.

Can any UK pension be transferred to a QROPS?

Not all pensions are eligible for transfer. Your pension provider will assess your fund to determine if it qualifies for a QROPS transfer.

How do I choose a QROPS jurisdiction?

You will work with your financial advisor to select the most suitable QROPS jurisdiction based on your individual circumstances and preferences.

What happens after I choose a QROPS?

Once you've selected a QROPS, the necessary paperwork will be completed and submitted. Your pension provider will then transfer the funds to your chosen QROPS.

What are the potential benefits of transferring to a QROPS?

QROPS can offer tax efficiency, a wider range of investment options, and the ability to receive income in your preferred currency.

Disclaimers

The complete name of Tata AIA Fortune Guarantee Pension Plan is Tata AIA Life Insurance Fortune Guarantee Pension Plan (UIN:110N161V10) - A Non-Linked Non-Participating, Annuity plan.
The complete name of Tata AIA Saral Pension is Tata AIA Life Insurance Saral Pension (UIN: 110N159V08) - A Single Premium, Non-Linked, Non-Participating, Individual, Immediate Annuity Plan
*The word Guaranteed and Guarantee means the annuity payout is fixed at inception of the policy and will be payable for whole of life or till death of the Annuitant(s).
^%Return of Purchase Price means you get back all the premiums you've paid, excluding any extra premiums, rider premiums, taxes, and other applicable charges.
^&Illustrated annuity rate (IRR) is for joint life where one of the annuitants is 60 years of age while the other is 69 or above for plan type - Joint Life Last Survivor Annuity with Return of 100% of Purchase Price (ROP) on death of the last survivor. IRR is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis.
^{^}The word Guaranteed, and Guarantee means the annuity payout is -fixed at inception of the policy and will be payable for whole of life or till death of the Annuitant(s).
^~Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfillment 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 implication mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you
Insurance cover is available under this product. For more details on risk factors, terms and conditions please read Sales Brochure carefully before concluding a sale.
Multiple options are available in Tata AIA Saral Pension: Immediate Life Annuity| Immediate Life Annuity with Return of Purchase Price| Deferred Life Annuity (GA-I) and with Return of Purchase Price| Deferred Life Annuity (GA-II) and with Return of Purchase Price.
In case of sub-standard lives, extra premiums will be charged as per our underwriting guidelines.
Buying a Life Insurance policy is a long-term commitment. An early termination of the policy usually involves high costs, and the Surrender Value payable may be less than the all the Premiums Paid.
Please know the associated risks and the applicable charges, from your insurance agent or the Intermediary or policy document issued by the insurance company and this document is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
L&C/Advt/2024/Oct/3110