Some people will have felt the pinch of the credit crunch, especially those with a mortgage and a business of their own. Pensioners are amongst this group that have also experienced the credit crunch, seeing that their state pension has decreased significantly. Those with a sensible backup plan will have had time to draw up a way to secure their finances in such a way that will keep them covered for a long period.
However, people planning to take out a retirement plan overseas will find that there are services in the UK that will ensure a secure distribution of the money. This is known as a qualified recognised overseas pension scheme; this allows for foreign pensions schemes to allow for transfers of money from a recognised UK pension scheme. As a UK resident, it is quite common for UK pensioners to change their existing plans and move abroad.
When it comes to receiving a pension plan, this may inevitably affect the way they receive their funds. Fortunately the qualified recognised overseas pension scheme offers the service of transferring one UK recognised pension to another abroad. This is a fully recognised HMRC (Her Majesty's Revenue & Customs) service; therefore it is not illegal and completely legitimate. However, with many legitimate services come specific criteria's and regulations that pensioners must follow.
With qualifying recognised overseas pension schemes come a designated number provided by the HMRC as long as they meet the relevant criteria. The criteria set out are directed towards the transference of funds and the manner in which the transferring if funds is conducted. Transferring funds across the sea can mean huge tax savings, if transferred to a tax friendly country. The idea is for the pensioner receiving the funds, will not lose out on the amount they receive.
The requirements set out for qualified recognised overseas pension schemes are as follows:
* You must have been a resident of the UK for five years or more, otherwise you will be taxed heavily when transferring your pension out of the UK.
* The scheme manager, to which the pensioner has chosen their service, must notify the HMRC that the scheme is a qualified and recognised scheme with proof of evidence.
* It is also the responsibility of the scheme manager to inform the HMRC of the country that the scheme is taking place, ensuring that the scheme fulfils the main objectives of an overseas pension scheme (that the country has a UK Double Taxation Agreement)
* The pensions or lump sums are not provided before the minimum pension age.
* The scheme is entered on the basis that the person is a resident or within the territory of which the scheme has been established.
Taking money from the scheme is possible anytime between the ages of 50 and 75 years old, however this must be taken out by the age of 75. As of 6th April 2010 the scheme will change effectively from 55 to 75 years. All such information is readily available on the internet, whereby people thinking about moving abroad can organise their current UK pensions accordingly. The steps may seem convoluted at first, however each of the proceedings are necessary to avoid penalty charges and high tax charges. The scheme you choose to go with must be a recognised HMRC scheme and should follow the procedures according to the financial and revenue laws.
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