QROPS in the UAE



By David Erhardt of STM Group

For British expats planning on spending their retirement in the United Arab Emirates (UAE), pension planning is something that should be factored in at an early stage.

A QROPS is an excellent way to maximise the benefits available because it provides far better flexibility and tax efficiency than a private pension held in the UK. It can provide savings of up to 50 percent, and a significant difference in quality of life during retirement.

No tax


After five years of residency in the UAE, QROPS are taxed at local rates which, considering that the UAE does not tax individuals at all on income, net wealth, investments or capital gains, is a massive plus.

A further major benefit of a QROPS is the ability to pass on the entire fund to the beneficiaries of a will, unlike in the UK. With good tax planning, UK inheritance tax can be avoided too, and there is no inheritance tax in the UAE. Note, however, for those that die in the UAE, local Islamic Sharia law will apply, so a will is essential.

QROPS in the UAE


Currently there are no QROPS available in the UAE itself, but this is not a limiting factor as they can be held in numerous jurisdictions worldwide, such as Guernsey, Malta or the Isle of Man, and paid into a UAE bank account in local currency (Dirhams). Doing so offers the additional benefit of avoiding exchange rate issues with sterling, so retirees can have a much better idea of the total worth of their scheme at any one point.

David Erhardt, Pensions Director at the independent international tax company STM Group, says it’s important to select the most appropriate QROPS for each individual’s situation.

“What clients need varies depending on whether they are looking to take a lump sum, what kind of assets they want to invest, and so on. A range of QROPS products are available all around the world, so it’s important to discuss them fully with a qualified international tax advisor to choose the right one. The excellent flexibility provided by QROPS in financially sound jurisdictions means retirees who have moved to the UAE from the UK can make the most of life abroad. QROPS make sound financial sense and tick all the boxes for British expats.”

Making the most of retirement


Wherever a QROPS is held, it must meet certain criteria set out by HMRC. The scheme acts as if it were a UK scheme for QROPS members who have been residents in the UK at any time in the previous five tax years, before local laws apply and the tax benefits can be maximised.

After this, clients can take advantage of local taxation rates and this is where a QROPS really helps in mitigating tax. For retirees living in the UAE with a British private pension, a QROPS can help make the money go much further than keeping it in the UK.

QROPS potential in the UAE


The lifestyle the UAE continues to offer expats, the remarkable infrastructure and the low taxes seem set to keep on attracting Britons for their retirement. For those planning to settle in the UAE for over five years, a QROPS offers real potential savings.



For more information about STM QROPS, please email david.erhardt@stmfidecs.gi, or telephone the pensions team in Gibraltar on (+350) 200 52476 for a confidential, no obligation discussion.

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DavidErhardt's picture
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David Erhardt is responsible for the Pensions Division of STM Fidecs, part of STM Group Plc. Becoming a member of the...
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