Treating unspent QROPs monies as part of your inheritance strategy

Published:  29 Aug at 6 PM
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Expats are now asking the question they don’t want to think about - what happens to money in their QROPS when they die.

Making a will is a necessity ignored by a high number of expat retirees, wherever in the world they’re located. Whist it’s not a subject expat retirees want to dwell on, it’s especially important to make sure money still in a QROPS goes to the intended person once its owner passes on, rather than to the home country's greedy taxman. It’s necessary to nominate the beneficiary by simply filling in the correct form and filing it with the provider of the QROPs.

One small piece of good news is that UK taxes are only payable if the beneficiary is resident in the UK for tax purposes, although tax many be payable under the laws of the deceased’s country of residence. It’s not advisable to withdraw monies remaining in a QROPs and pay them into a bank, as they then become subject to inheritance tax as a part of your estate. The tax itself depends on factors such as whether the deceased was over or under 75 years old, how the money is paid and the location of the beneficiary as well as the deceased.

Should the beneficiary decide to withdraw funds from the QROPS within two years of receiving the inheritance, tax may also become due. It should also be remembered that, in the UK, work-related or private pensions are not considered as part of net wealth, thus removing them from being liable to inheritance tax. It’s also advisable to check whether your country of residence treats taxation of QROPS funds as does the UK. If you’ve wealth, property or other holdings in more than one country, it’s best to make two separate wills, thus ensuring your relatives and other beneficiaries are able to receive their inheritance as you would have wished.
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