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Old 19.01.2012, 14:19
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Transfer UK pension to QROPS in Switzerland after 5 UK tax years

Hi,
has anyone ever transferred a UK pension to Switzerland to a QROPS and had full access to the cash? I mean, having the QROPS to pay it out to a personal bank account after the 5 year holding period is over.
I know it is easy to transfer the pension from UK to a QROPS and I have done it before for around GBP 10k but it went into a pilar 2 (Saeule 2) account which I can not access until retirement, buying a house, selfemployment etc.
A QROPS has no obligation to report cash withdrawals to HMRC once the member (me) has been lived outside the UK for a minimum of full 5 tax years, in my case by April 6th 2012 and has no intention of returning to the UK. HMRC only allows transfers to QROPS, otherwise there will be a fine of up to 55% of the value.
So does anyone know a QROPS that can put the funds into a non pilar 2 account to have access to the cash?
I am aware of the QROPS list on the HMRC website, most of them being Pensionskassen or Stiftungen, which is always pilar 2 and blocked.
I am looking for an alternative which can pay out the funds once the 5 years are over.
Looking forward to your answers.
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Old 19.01.2012, 14:27
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

Either you've been targeted by a cold-calling broker or you are a cold-calling broker and will shortly be replying in a different guise to your own question.
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Old 19.01.2012, 14:34
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

Hi, I can assure you I am not. I just read a lot about it on the HMRC website and on the internet in general.
I worked in the UK from 2001 until 2006 for 2 different companies.
2nd job was for 3.5 years which is the pension I am trying to transfer now. The pension of GBP 10k which I transferred already was with another company where I stayed 1.5 years.
I studied the HMRC website and all of their FAQs and I can not see it being wrong transferring my pension to a QROPS after 5 years and not getting fined.
So I am not talking about a huge amount here. I just do not want to transfer it to a pilar 2 but have access to the cash instead.
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Old 19.01.2012, 14:35
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

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A QROPS has no obligation to report cash withdrawals to HMRC once the member (me) has been lived outside the UK for a minimum of full 5 tax years, in my case by April 6th 2012 and has no intention of returning to the UK. HMRC only allows transfers to QROPS, otherwise there will be a fine of up to 55% of the value.
So does anyone know a QROPS that can put the funds into a non pilar 2 account to have access to the cash?
I am aware of the QROPS list on the HMRC website, most of them being Pensionskassen or Stiftungen, which is always pilar 2 and blocked.
I am looking for an alternative which can pay out the funds once the 5 years are over.
Looking forward to your answers.
I've been out of the UK for over 5 years and am interested in this also. Please make sure you update this thread if you get anywhere with it.
Like you say, in CH they are all pilar2 schemes.
thanks.
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Old 19.01.2012, 15:20
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

To transfer to a Qrops you dont need to be out of the UK 5 years you only need to be out of the Uk for 5 years if you are to take the 30% tax free lump sum.

Which could be changing to 10 years come April 6th.

The only way you can access the cash is by transferring to New Zeland but there are huge costs and there is a very high risk of being fined by the HRMC which is now 72% not the 55% you quoted.

And Qrops is not for everyone i.e final slary penions, goverment or military.
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Old 19.01.2012, 15:57
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

@swans1984: I do not agree with your post, mind you I only did my research on transfers from UK to Switzerland.
It is a fact, that HMRC only accepts transfers from UK to Switzerland if the pension is transferred to a QROPS, regardless of the 5 year period.
You can only ever transfer to a QROPS in Switzerland, unless you want to pay the 55% penalty & tax.
HMRC also says on their FAQ that a QROPS has no obligation to report any transfer out of the QROPS. So I could transfer it to any pilar 2 account after the 5 years. Transferring it to another pilar 2 account within the 5 years will also be fined.
All the information is on the HMRC website, which I have studied for a couple of weeks.

Here is what I will have to do anyway:
1. Get a statement and transfer form from my UK pension (received already)
2. Have the UK pension transferred to a QROPS in Switzerland
3. Wait until April 6th 2012 when my 5th full tax year outside UK is over
4a. Transfer it to any pilar 2 account or
4b. Transfer it to out of the QROPS to a bank account to have access to the cash

Again, I am not a broker and I can only recommend to everyone who is planning to transfer a UK pension to do it themselves.
It is very easy, just get the statement and transfer form from your UK pension, contact any QROPS or your employers pension scheme about the transfer and have it transferred. In my case the QROPS gave me support without chargin me and I only transferred a rather small pension of GBP 10k.
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Old 19.01.2012, 18:35
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

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4b. Transfer it to out of the QROPS to a bank account to have access to the cash
Surely you can not do this?
I thought Swiss pension rules apply if you have transferred into a Swiss pension?
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Old 19.01.2012, 18:37
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

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Surely you can not do this?
I thought Swiss pension rules apply if you have transferred into a Swiss pension?
I thought the same sounds very strange to me, its the same really as cashing in the New Zealand way,
As legally you can only get a maximum of 30%.
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Old 19.01.2012, 16:01
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

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To transfer to a Qrops you dont need to be out of the UK 5 years you only need to be out of the Uk for 5 years if you are to take the 30% tax free lump sum.
@Swans1984: I never said you have to be outside the UK for 5 years to transfer to a QROPS. You can have it transferred as soon as you leave the UK.
You will have to wait for 5 full tax years until you can get it out of the QROPS you transferred it to, otherwise you will be fined.

Last edited by Longbyt; 19.01.2012 at 18:11. Reason: quote
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Old 19.01.2012, 18:32
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

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@Swans1984: I never said you have to be outside the UK for 5 years to transfer to a QROPS. You can have it transferred as soon as you leave the UK.
You will have to wait for 5 full tax years until you can get it out of the QROPS you transferred it to, otherwise you will be fined.
Also you need to be 55 years old or over to get your hands on the money and then you can only get 30% of the pension pot tax free.

The way you expalined it sounds strange, as for 10k there it will not be worth transferring due to the set up costs and the management fees of teh trustee.
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Old 19.01.2012, 18:51
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

To clarify a few points here:

You can transfer to a QROPS at any time. You do not even have to leave the UK to transfer the pension to a provider based in another country.

If you choose to transfer to a non QROPS approved scheme you will incur a charge. namely 40% tax plus a surcharge of 15% if the HMRC choose to enforce it. The recieving scheme can also incur a charge of up to 40% again based upon the discretion of the HMRC.

In terms of withdrawal, my knowledge in Switzerland is that the only QROPS approved pensions are Pillar 2, given the Swiss mentality about the need to provide for the future I do not believe they would allow you to cash the pension in until the legislated retirement age. What they would allow you to do is transfer it to a non QROPS approved scheme in another jurisdiction which if chosen correctly may let you withdraw the fund in cash (where these funds are I do not know. They will also allow you to either withdraw or pledge the pension for the purchase of a primary residence, however the amount withdrawn must be made up before any additional pension can be purchased. Now, aslong as any of these options (excluding the pledging as this is not a withdrawal) are completed once you have been non resident in the UK for at least 5 full tax years +1 day then the action is non reportable to the HMRC. If completed within less than 5 full tax years +1 day then it is reportable and the same taxes/charges are applicable as if you had transferred to a non QROPS approved scheme.

This has nothing to do with the age of the account holder

The charges are only determined by the period of time you have been non resident in the UK for tax purposes, it has nothing to do with when you transfer the money.

Similarly it has nothing to do with any tax free lump sum as this is only paid as retirement.

As for the set up and management costs, transfer is effectively free if you do it yourself. All pension funds are chargeable by the fund holders in some form.

Finally, just because you have final salary/civil service pension does not mean you should not consider a transfer. The transfer value of either of these may be significantly higher that the transfer from a defined contribution scheme. This is based upon the fact the liability for the scheme is what determines the transfer value, not the actual amount paid to the fund. What I would say here is that personally I would not transfer a final salary scheme unless I felt the that a property purchase in Switzerland would yield greater results than my current final salary pension fund.

Edited to include. Withdrawals in Switzerland can also be made for the purpose of going self emplyed, however the same charging struct applies if the criteria are not met.

Final point. In summary, you effectively have to comply with british pension legislation for the first 5 full tax years + 1 day. Failing to do this will incur the charges. As long as you wait this minimum period what you do with your pension (obviously subject to the pension rules in the new jurisdiction) after that becomes non reportable to the HMRC

Last edited by kb92830; 19.01.2012 at 19:01. Reason: to add summary
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Old 19.01.2012, 19:23
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

The 30% tax free lump sum can be taken anytime after the age of 55, not only on retirement.

Set up costs are charged even if you do its yourself.

And a Qrop can not be done if you still plan to live in the UK, you can do it upto 12 moths before leaving the UK.

A final Salary and Civil Service pension normally have benefits which are better than Qrops can offer, if an Adviser advises someone to transfer one of these they are only after the commission not looking after the needs of the client.

Qrops is not for every a recent survey showed of Qrops transferred 38% was mis sold
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Old 20.01.2012, 09:38
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

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In terms of withdrawal, my knowledge in Switzerland is that the only QROPS approved pensions are Pillar 2, given the Swiss mentality about the need to provide for the future I do not believe they would allow you to cash the pension in until the legislated retirement age. What they would allow you to do is transfer it to a non QROPS approved scheme in another jurisdiction which if chosen correctly may let you withdraw the fund in cash (where these funds are I do not know.
KB, this is pretty much what I was looking for.
I will reach my retirement age in about 20 years and I am only talking about a relatively small pension I am going to transfer.
My 5th full UK tax year will be over in 3 months as I left the UK in Summer 2006, so I will continue to look for a QROPS in Switzerland that does not book the receiveing transfer into a pilar 2 so I could have access to the cash.
I will probably wait until mid April to have it transferred, by then the QROPS will not have to report it.
If this does not work I would still transfer it to a QROPS in Switzerland and have it transferred to my employers pension (non QROPS) after April 2012.

I already transferred a small pension of about GBP 10k a couple of years ago into a pilar 2 QROPS, this had to be done there and then as I would have lost it if not transferred on time.
There were no fees or taxes charged on this and from April 6th I could move this to my employers pension fund.
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Old 24.06.2014, 18:02
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Re: Transfer UK pension to QROPS in CH - NOTE - 10 years now

Hello
May I restart this discussion? Today is the 24.06.2014.


I work for a 2-pillar (vesting) foundation in Switzerland and we have some QROPS clients.


I do not mean to use this as a "selling space" but a lot of good People from GB are not enough informed about their possibilites in Switzerland.


Please note: it's not 5 years, but it is 10 years now.


Normally there is no way to get the Money directly. The GB-Goverment saw to this because else they would loose tax-Money.


As I mentionned: normally.... see the flag?


If you are interessted in my advice so please feel free to contact me here.
And yes I am Swiss - German is my daily language.
Kind regards
2Pillar
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Old 24.06.2014, 19:46
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Re: Transfer UK pension to QROPS in CH - NOTE - 10 years now

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Hello
May I restart this discussion? Today is the 24.06.2014.


I work for a 2-pillar (vesting) foundation in Switzerland and we have some QROPS clients.


I do not mean to use this as a "selling space" but a lot of good People from GB are not enough informed about their possibilites in Switzerland.


Please note: it's not 5 years, but it is 10 years now.


Normally there is no way to get the Money directly. The GB-Goverment saw to this because else they would loose tax-Money.


As I mentionned: normally.... see the flag?


If you are interessted in my advice so please feel free to contact me here.
And yes I am Swiss - German is my daily language.
Kind regards
2Pillar
As you can take 100% cash at age 55 the possible benefits of transferring have gone up in smoke.

10 years from becoming non resident is an important date as well, of course all subject to change in retrospect as before....
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Old 11.12.2014, 11:30
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Re: Transfer UK pension to QROPS in CH - NOTE - 10 years now

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Hello
May I restart this discussion? Today is the 24.06.2014.


I work for a 2-pillar (vesting) foundation in Switzerland and we have some QROPS clients.


I do not mean to use this as a "selling space" but a lot of good People from GB are not enough informed about their possibilites in Switzerland.


Please note: it's not 5 years, but it is 10 years now.


Normally there is no way to get the Money directly. The GB-Goverment saw to this because else they would loose tax-Money.


As I mentionned: normally.... see the flag?


If you are interessted in my advice so please feel free to contact me here.
And yes I am Swiss - German is my daily language.
Kind regards
2Pillar
The simple way I understand this is: if you move them to Switzerland under a QROPS scheme you need to wait 10 years before you can do anything with them at all.

After 10 tax years, you can do whatever you want with them. Not 100% sure if you can take as cash but definitely use them to buy a house if you want.

Someone correct me if I am wrong, but for the first 10 years you're pretty much unable to do anything rather than watch them. Still, it's better than waiting until 55 if you're young.
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Old 11.12.2014, 11:41
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Re: Transfer UK pension to QROPS in CH - NOTE - 10 years now

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The simple way I understand this is: if you move them to Switzerland under a QROPS scheme you need to wait 10 years before you can do anything with them at all.

After 10 tax years, you can do whatever you want with them. Not 100% sure if you can take as cash but definitely use them to buy a house if you want.

Someone correct me if I am wrong, but for the first 10 years you're pretty much unable to do anything rather than watch them. Still, it's better than waiting until 55 if you're young.
Who knows what the rules will be after 10 years........ They changed retrospectively before. As the UK does not allow the funds to be used for house purchase who is to say that they don't decide it's pension busting after the event.
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Old 02.01.2015, 19:56
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

True but I dont think they could get away with it for long if they raised it more than 10 years, it would be hard to justify. If someone is out of the country that long what's the point?

For anyone under 40 it still makes sense to move them here. Exchange rate right now is very favourable.
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Old 09.06.2015, 17:35
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Hi,
I am 50 years old, have a pension fund (TV awaited from my previous fund managers) which I would like to transfer to CH (Pillar 2) and pledge it to buy a home here in CH.
I am two months old in CH, British Citizen.
Is this possible and what are the top 3 key concerns I must consider?
Any guidance will be greatly appreciated.

Of course I understand the need to comply with QROPS and my potential transfer will be from a UK pension fund.
In fact, I have a second small one as well, which I plan to leave behind unless I can combine both and transfer at one time with no or minimum transfer costs.

Last edited by 3Wishes; 18.10.2016 at 22:02. Reason: merging consecutive replies
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Old 09.06.2015, 17:50
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Re: Transfer UK pension to QROPS in Switzerland after 5 UK tax years

The pension can't be pledged for five years after the transfer - time in CH is unfortunately irrelevant.

For those five years the UK tax authorities require the pension to be treated pretty much that same as a UK one, so no pledging.

Sorry, just realised UK has gone through pension changes so checked further and found this on qropdirect.com

Quote:
Can I purchase residential property with my QROPS fund?
• Yes - If you have been a UK resident at any time in the last five tax years.
• If you have a QROPS and have not been at any time resident in the UK for the last 5 tax years, then the operation of the QROPS trust is subject to the legislation associated with the jurisdiction where the QROPS is based.
• Some of these jurisdictions do permit investment into residential property although most frequently this will be only permitted through indirect ownership that is through a corporate structure or property fund.
However as this contradicts professional advice I received in December, may just be advertising blurb with no basis.

Last edited by newtoswitz; 09.06.2015 at 17:59. Reason: Added potential correction
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