You can transfer your pension savings from a registered pension scheme to an overseas pension scheme, QROPS are increasingly popular under British Expats due to the tax advantages on the pension draw downs and death benefits.

1. Avoiding Inheritance Tax – QROPS
If you are a British expat, avoiding inheritance tax is a top priority
whilst considering estate protection for the family. This can be
done easily through a QROPS transfer. The new
Conservative/Liberal Democrat coalition has introduced some
sweeping tax changes, but conspicuous by its absence was the
Tories‟ proposed increase in the Inheritance Tax threshold from
£325,000 to £1 million. Yet, anyone planning on avoiding
inheritance taxshould be aware that it is a tax that can be avoided
with correct planning even if you still live in the UK. If you are an
expat, you can avoid inheritance tax on your pension through a
QROPS pension transfer.
Avoiding Inheritance Tax
In the UK, the first £325,000 of an estate (also known as the “nil
rate band”) is free from IHT. Furthermore, recent rule changes
means that passing an estate to a spouse is now completely free of
IHT and both tax-free allowances can be used on the surviving
spouse‟s death. Therefore, if you are married to a UK national,
only estates in excess of £650,000 are likely to incur IHT. If you
are married to a non-UK national, for example, you have a Thai

2. wife and you live in Thailand, the spouse‟s tax free allowance is
only £55,000. She would only be deemed domiciled in the UK and
receive the full allowance if she were domiciled in the UK for the
three years immediately prior to the transfer. If she had been
living in the UK and wanted to retire in Thailand, she probably
also wouldn‟t be applicable for the full allowance.
However, with some advanced planning, avoiding inheritance tax
can be quite easy even if estates are well above this amount.
Avoiding Inheritance Tax
● The first and perhaps easiest step in avoiding inheritance tax is
to write a will. A will is perhaps the easiest way to avoid IHT
problems on death. The laws of intestacy are clumsy when it
comes to IHT. You will also make life considerably easier for your
descendants. You don‟t want a lengthy probate battle after your
death;
● Take out a Whole of Life assurance policy written under trust.
Such a policy will pay a lump sum on death, but because it is
written under trust that lump sum is not considered part of the
estate. Hence, the premiums paid are effectively a transfer of
assets from within the estate to outside the estate, and no IHT is
due;
● Avoiding inheritance tax. Set up pension arrangements under
„Spousal Bypass Trusts‟. A spousal bypass trust also avoids IHT
being payable on the assets within your pension. On death,
instead of transferring to your spouse, the pension is transferred
into a trust for the benefit of, say, your children. The surviving
spouse does not have access to the assets directly but can borrow
from the trust, with the loan being written off on his or her death.

3. Not only does the pension fall outside of the estate, but the loan
reduces the value of the estate of the surviving spouse, thereby
reducing his/her IHT bill as well;
● Gifts of up to £3,000 can be made per recipient per year without
any IHT implications;
● Yet regular payments out of income without a reduction in your
standard of living are also exempt for IHT purposes;
● And importantly, one-off gifts can be made in excess of £3,000
and while there is a seven year survival period when it comes to
avoiding inheritance tax, the IHT liability tapers down from year
three. Furthermore, the recipient is entitled to take out a life
assurance policy that matches the potential IHT exposure. The
premiums on such a policy will inevitably be lower than the IHT
payable, so the seven year survival period really should not be a
major consideration.
For British expats who want to transfer to a QROPS France,
Spain, Thailand, etc., avoiding inheritance tax through a QROPS
pension transfer is simple. If you have any commercial property,

4. you can also include this in your QROPS. Avoiding inheritance tax
is easy witha QROPS pension transfer.
For more information, email info@qropsspecialists.com