Once a UK pension has been transferred to a different jurisdiction it is then subject to the legislation and tax rules of the new jurisdiction. This could be a low or no tax jurisdiction with obvious attractions.

Providing the jurisdiction of the QROPS allows it, it is even possible for the pension member to receive the full capital value of their pension with few or no tax implications, providing the age of the member is not less than the minimum pension age for the UK (currently 50 but due to rise to 55).

However a QROPS manager (as a condition of HMRC-QROPS approval) has to report to the HMRC any payments made to the pension member during the first five tax years of a pension members non UK tax residency.. Hence a pension member who has already been non UK tax resident may deduct that number of full tax years from the 5 years referred to as the 5 year rule (regulation3(3) of S1 2006/208 and paragraph 2 of Schedule 34 Finance Act 2004).

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