QROPS or Qualifying Recognised Overseas Pension Scheme, is an overseas pension scheme that meets certain requirements set by Her Majesty's Revenue and Customs (HMRC). A QROPS can receive transfers of United Kingdom (UK) Pension Benefits without incurring an unauthorised payment and scheme sanction charge.
Indians who have worked in UK might have made some regular contribution from their income towards a pension fund. Now if they plan to move out of UK, the UK Government allows transfer of their pension funds to pension schemes in India registered as QROPS.
About QROPS
What is QROPS?
QROPS is an overseas pension scheme that can receive transfers of UK Pension Benefits without incurring an unauthorised payment and scheme sanction charge.
Why is it popular?
QROPS is popular with UK’s expatriates and Indian nationals who have worked in the UK because it can facilitate transfer of money from UK to India.
We offer 3 retirement plans under QROPS
In ULIPS, the investment risk in the investment portfolio is borne by the policyholder
- Pay premium only once and get regular income for life
- Protect your savings from market downturns through an Assured Benefit*
- Get Pension Boosters** to increase your retirement savings
*The Assured Benefit amount shown assumes all due premiums as per the premium payment term shown above are paid. On maturity, you will receive higher of Assured Benefit or fund value. Assured Benefit will be 101% of total premium paid which is applicable only on maturity of the policy and does not apply on death or surrender.
**On completion of the tenth policy year, the Pension Boosters will be added for every subsequent fifth policy year provided at least five years’ premiums have been paid. It will be equal to 2% of the average daily total Fund Value of the previous 12 months.
In ULIPS, the investment risk in the investment portfolio is borne by the policyholder. Unlike traditional products, Unit linked insurance products are subject to market risk, which affect the Net Asset Values & the customer shall be responsible for his/her decision. The names of the Company, Product names or fund options do not indicate their quality or future guidance on returns. Funds do not offer guaranteed or assured returns.
Know more about QROPS
What is Qualifying Recognized Overseas Pension Scheme (QROPS)?
A Qualifying Recognised Overseas Pension Scheme, or QROPS, is an overseas pension scheme that meets certain requirements set by Her Majesty's Revenue and Customs (HMRC).A QROPS can receive transfers of United Kingdom (UK) Pension Benefits without incurring an unauthorised payment and scheme sanction charge.Indians who have worked in UK might have made some regular contribution from their income towards a pension fund. Now if they plan to move out of UK, the UK Government allows transfer of their pension funds to pension schemes in India registered as QROPS.
When was the QROPS legislation introduced?
In April 2006, the HMRC introduced QROPS for individuals with UK pensions to move their pensions with them when they leave the UK permanently.
What is Her Majesty’s Revenue & Customs (HMRC)?
Her Majesty’s Revenue & Customs (HMRC is the UK’s tax authority responsible for making money available to fund the UK’s public services and for helping families and individuals with targeted financial support.
What are the key benefits of a QROPS Pension Transfer?
- Tax efficiency
1. Income from Pension and distribution will not be under UK tax legislation. UK income tax is up to 40% and death tax at up to 55%.
2. No capital gains tax on investments - Ability to manage multiple pension schemes into a single pension scheme for easy management
1. Freedom of investment choice
2. Access to global funds, wider asset classes and diversified strategies with potentially higher investment returns
3. No requirement to buy an annuity - Flexibilty of investment with a range of investment options available with limited restrictions
- Inheritance tax free
- Multiple currency for investments
When can you opt for QROPS?
You can opt for QROPS if you have accumulated a pension fund in the UK and wish to transfer the same to India, in a retirement product registered as QROPS with HMRC.
You need to get in touch with your U.K. fund manager to understand the complete process, any formalities required and to get the complete set of latest version of forms. The forms that are required are Cash Equivalent Transfer Value (CETV) forms which include:
- Transfer Quotation
- Transfer out discharge forms
- Life Time allowance form
- APSS 263
- Any other form as per fund manager requirement
What is the QROPS transfer process?
- Register yourself with ICICI Prudential for QROPS transfer
- Obtain Statement of Account, Transfer Payout Form & Life Time Allowance from the Fund House
- Submit Fund House Docs, KYC, HMRC Forms & Customer Declaration to ICICI Prudential, post choice of QROPS Scheme
- QROPS Transfer application from ICICI Prudential to UK Fund House
- Transfer of funds from UK Fund House to ICICI Prudential.
- Login of New Business Plan
Who can apply for a QROPS?
Anybody who is in the age group of 18 to 75, has worked and accrued UK pension, especially Indians and are currently living outside the UK, or intend to leave in the imminent future.
What if I am currently living in the UK, can I still apply?
UK citizens are free to apply for a QROPS, however you must show that you have a clear intention to leave the UK within the next year.
Which products of ICICI Prudential are registered with HMRC as QROPS?
The following pension products are registered as QROPS with HMRC:
- ICICI Pru Easy Retirement (Regular premium)
- ICICI Pru Easy Retirement (Single premium)
- ICICI Pru Immediate Annuity
What documents are required to initiate the pension fund transfer?
Documents required by fund house:
- Fund statement issued by fund house
- Overseas transfer application, part of fund statement issued by fund house
- HMRC form APSS263
- HMRC form APSS262
- HMRC form CA1890
- Passport copy (few fund house insist for original documents for verification)
Documents required by ICICI Prudential (receiving scheme):
- Customer declaration
- KYC documents ID and address proof
- Cancelled cheque copy
The Fund House in the UK may ask for other documents depending on their processes/requirements
How much time is taken by UK based fund houses for transferring the pension fund?
The TAT for fund transfer is controlled by fund house. On an average it takes them 2 to 3 months to transfer the funds once they receive the complete set of documents. However, this may take more time if they raise further requirements. As per UK regulations they are bound to transfer the fund within 6 months from the date of receiving complete application for Fund Transfer.
What is the minimum age for drawing the benefit and how much?
In a product purchased through QROPS pension transfer, access to benefits from the policy proceeds both in the form of tax free commutation and annuitisation, would be available only when you attain an age of 55 years.
You will be entitled to take up to 30% of the accumulated amount as lump sum and it will be tax free, however remaining funds needs to be utilized to provide income for life.
What is the minimum amount which can be transferred?
There is no lower cap defined for transfer of pension fund through QROPS. However, receiving scheme can have minimum investment amount. Like all the registered products of ICICI Prudential have minimum premium amount. In case the transferred amount is less than the minimum amount member would need to add INR amount to the transferred amount for investing in the chosen QROPS solution by us.
What is the maximum amount which can be transferred?
There is no maximum limit on the transfer nor on the investment amount in our registered products.
I had applied for my fund statement with UK fund house, which I have received now. What further action is required to initiate the transfer?
To initiate the request for fund transfer, register yourself on ICICI Pru life QROPS page and our expert will get in touch with you for guidance.
If I transfer my UK pension to ICICI Prudential, can I access my fund as lump sum 100% or withdraw some percent and invest the remaining?
No, it is completely against QROPS rules. Once the funds are transferred to ICICI Prudential, entire amount need to be utilized to purchase a QROPS
Will the QROPS declare any payments made from the scheme to the HMRC?
During the first 10 tax years, the QROPS trustee is required to let the HMRC know of any payments, withdrawals, or transfers made from the QROPS.
After the first 10 years, the QROPS trustee is no longer required to let the HMRC know of any payments, withdrawals, or transfers made from the QROPS.
What happens if I return to the UK?
If you return to the UK for a short trip and your status remains as non-resident then your QROPS will stay as it is. However if you return to the UK to work then your QROPS will be subject to UK rules and regulations, despite the fact that it will remain offshore.
What will happen to my QROPS Pension Transfer upon my death?
The QROPS trustee ensures that all remaining assets upon death of the policyholder are distributed to the Named Beneficiaries.
ICICI Prudential Life Insurance Company Limited. IRDAI Regn No. 105. CIN: L66010MH2000PLC127837. ICICI Prudential Life Insurance Company Limited. Registered Address: ICICI PruLife Towers, 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025. For more details on the risk factors, term & conditions please read sales brochure carefully before concluding the sale. Call us on 1-860-266-7766 (10am-7pm, Monday to Saturday, except national holidays and valid only for calls made from India). Trade Logo displayed above belongs to ICICI Bank Ltd & Prudential IP services Ltd and used by ICICI Prudential Life Insurance Company Ltd under license. UIN of the ICICI Pru Easy Retirement - 105L133V02 and ICICI Pru Easy Retirement Single Premium - 105L138V02. UIN of ICICI Pru Immediate Annuity - 105N009V08. Advt. No.: W/II/0542/2017-18.