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QROPS advice

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  • 30-07-2017 10:52am
    #1
    tonyowens_uk
    Registered Users Posts: 2 ✭


    I have a small DB occupational pension scheme with an ex employer in the UK. I have been tax resident in Ireland for over ten years and run a small R&D business. I don't expect to depend on this pension significantly in my retirement. The current transfer value of the pension is 250k after conversion to euros.
    I am 54 now and had considered extracting 25% of this pension in the next year or two under the UK's tax-free lump sum payment provision to form part of a capital-raise for a specialist engineering business. I have been advised that after 6th March 2017 that this would no longer be tax efficient in that Inland Revenue post Finance Bill 2017 has introduced rules that:

    1. QROPS transfers out of the UK made up of 'UK-relieved funds' are liable to UK tax rules for 5 tax years after the transfer
    2. A tax charge of 25% is now applied to any payments out of funds transferred to a QROPS, if made within 5 years of the transfer date.

    I am confused about this. I thought that under UK pension tax rules lump sums of up to 25% were payable tax-free to persons aged 55 or more. Why then would this not apply to a payment out of a QROPS?

    My intention was to invest the balance of the fund into a managed pension fund and forget about it for a few years.
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