Malta QROPS Transfers for USA Residents and Citizens

Transferring a British pension to a Malta QROPS (Qualifying Recognised Overseas Pension Scheme) can offer real retirement saving benefits to expats.

If you already live Stateside or are planning to go and live permanently in the US, a Malta QROPS can offer a flexible, tax-effective pension solution.

Many financial advisers favour Malta QROPS, as the European Union nation has concluded a tax treaty with the US that includes a welcome clause protecting pension funds managed on the Mediterranean island.

The treaty establishes Malta QROPS as a USA qualifying pension fund – which means retirement savers pay no tax on their fund in Malta and any income or gains are also tax-free in the US.

This is an important benefit and offers welcome peace of mind to British expats or international workers in America who have UK pension rights.

Therefore the best solution for a USA QROPS is a Malta based pension scheme.

Who can benefit from a Malta based QROPS

The list includes:

  • UK nationals moving permanently to America
  • US nationals who have UK pension rights returning to the US
  • US expats living outside the US
  • US nationals with UK pension rights resident outside both countries
  • Green Card holders living outside the US and the UK

Another bonus for British expats in the US is investing in a QROPS can prove tax residence as the schemes are closed to UK residents.

Malta QROPS features

In many cases, standard Malta QROPS features give US residents a host of investment and tax benefits, including:

  • Setting off foreign tax credits on transferring funds to the QROPS
  • Safeguarding investment growth from US taxes
  • The option of taking a 30% tax-free cash lump sum on retirement and possibly further lump sums
  • A platform for investing in US dollars with pension income paid in US dollars direct to US banks

Other benefits include estate planning opportunities as unspent QROPS funds are beyond the reach of the UK tax man, providing the pension beneficiaries live outside of Britain.

Malta is an established QROPS financial centre, where pensions are subject to strict regulation.

Funds are monitored and protected by the Malta Financial Services Authority and are compliant with European Union finance regulations.

Malta is home to 15 schemes that are on the QROPS list.

It is important to realise that not all QROPS are equal and professional regulated financial advice is required to transfer your UK pension to a QROPS. Contact the experts at QROP.org for further information and advice.

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2 Comments

  1. 1. “Another bonus for British expats in the US is investing in a QROPS can prove tax residence as the schemes are closed to UK residents.”

    Yet HMRC’s own website says Transfers out of UK registered pension schemes to pension schemes abroad will be authorised payments as long as the overseas scheme is a “qualifying recognised overseas pension scheme” (QROPS). You will not have to emigrate to do this.”

    How on earth does having a QROPS prove tax residence? It does nothing of the sort.

    2. How are the individual’s funds protected, does the MSFA guarantee the funds in the QROPS somehow?

    3. Is income taken from a QROPS really tax free in the US. Doesn’t this have to be declared?

  2. The article appears to miss the point about a transfer of a UK pension by a US person. It is the transfer from the UK to Malta which is the problem-not a Malta QROPS. The IRS have made it clear that a transfer of a UK pension by a US person to another jurisdiction -such as Malta would be considered a distribution for US tax purposes. If the transfer takes place before the transferee becomes a US person then there would not be a problem

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