With more and more British expats in Turkey, there are new schemes in place where you can save a host on tax levies.
A report by The Financial times declares that UK businesses who reported annual results for the financial year ending March 2013 has shown an increased short fall in pension funds of nearly £100bn.
This means a rise in the numbers of UK companies going bust featuring a list of well renowned brands. So is that company pension fund you have spent years paying into safe anymore?
Yet expats now have the chance to sidestep more than 50% tax if you pass away as well as around 45% by simply transferring your salaried pension fund or scheme set up in the UK to an officially recognised QROPS Turkish scheme.
This means for British expats no longer resident in the UK, you can legally avoid unnecessary UK taxes.
What is QROPS?
QROPS stands for Qualifying Recognized Overseas Pension Scheme. QROPS was introduced in 2006 by the HMRC. It enables you to transfer your existing pension in the UK offshore in order to decrease the level of tax.
This means for expats in Turkey, you will not have to pay any more tax charges in the UK as far as your pension is concerned. In addition as long as you remain overseas for a period of 5 years or more, the burden to HMRC finishes.
Currently, those individuals residing in Turkey can benefit from their overseas address whereby you can simply convert your fund into a QROPS scheme.
This will ensure you will not have to lay out on additional tax costs in the long term. In this way, a QROPS scheme is considered to be ideal if you are moving to Turkey or retiring in the country.
What can I invest in?
Once you have a QROPS fund set up the choice is endless. Financial products you can invest in feature mutual funds, individual shares and corporate bonds.
Why is it beneficial for British expats?
With the number of people living and working in Turkey increasing year on year, there has never been a better time for Brits to enjoy tax reductions on their UK pension schemes.
Meanwhile, it will also offer protection for your family from having to fork out on high taxes if you were to suddenly pass away.
Another advantage of a QROPS pension in Turkey is the fact you can possess funds in a number of different currencies such as US Dollars, Euros or British Pounds.
Enjoying tax relief on a QROPS fund will enable you to take advantage of not only avoiding tax payments in the UK but avoiding a host of other financially crippling areas.
This means expats won’t have to pay out on dividends tax as well as capital gains tax or CGT not to mention have the flexibility of currency choice.
Furthermore, this signifies the way to financial freedom where you can create several opportunities to create high returns on investments.
QROPS Turkey providers
At present, there are only a handful of schemes available in Turkey including Allianz Hayat ve Emeklilik A. S. Pension Plan and Garanti Emeklilik Premium Pension Plan.
What if I decide to move back to the UK?
On the premise that you will be staying in Turkey for a considerable time, you will not be affected and the QROPS fund will increase with no UK tax charges to be paid.
However, if you decide to move back or retire in the UK, the pension will revert back to a SIPP or Self-Invested Pension Plan.
This all sounds too good to be true doesn`t it, but I’m sure you are aware that pensions can be a sticky subject. Fear not as YellAli has partnered with a number of experts in this field who can assist you.
All of the companies we partner with are regulated and have significant experience in organizing pension transfers to QROPs with a deep understanding of both the UK and Turkish financial sectors.
For more information, please speak to our specialist pension advisors for Turkey.