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Petition to abolish “unfair” expat retirement transfer tax takes shape

According to statistics from HMRC, the average value of a QROPS transfer over the more than 11 years since April 2006 has been £93,087, and under the 25% rule, transfers of this value would attract a charge of £23,272. Surely this is too much. But given that since 2006 around 105,000 pension savers have between them transferred close to £10 billion as part of QROPS arrangements it is easy to see why the government is reluctant to abandon such a lucrative tax.

Those behind a recent petition to the UK parliament certainly think so. The petition has labelled the charge as “unfair” and the creators have said it denies them the opportunity “to make the most of their retirement savings”.

“The overseas transfer charge discriminates against expats outside the EEA in a country which does not host a QROPS, making them pay a 25% exit tax on moving their pension fund from the UK to a QROPS to gain better financial terms,” said William Wilson, who lodged the petition on the website of UK parliament.

“The charge is unreasonable as the rules punish QROPS members for financial planning when savers with other pensions, like Self-Invested Personal Pensions (SIPPs), can live in the same place as a QROPS saver and suffer no transfer charge on moving their fund.”

It is also a concern that the tax seems to push against the notion of self-determination regarding financial expat affairs. If the government is serious about allowing people to have both freedom of movement and freedom to decide their own financial affairs, wealth management and pension planning, they should not be discouraging them and in some cases debilitating them for making bold choices in regard to their pensions.

In order to generate responses from parliament the petition needs to be supported by at least 10,000 signatures by the time it closes on 19 July 2018, so it could still be some time before the issue receives the debate it clearly deserves.

Other News

Sweden’s best city for study

Office Desk and LaptopNordic countries have a very good reputation with international students, and Sweden is no exception. But where in the country offers the best environment for study?

The Swedish National Union of Students (SFS) has recently announced the winner of its 2017/2018 Student City of the Year award. The award goes to the city that actively works to improve the welfare of students, and this year it went to the city of Gävle.

Gävle is the capital of the Gävleborg County, located at the very lower end of Norrland. It’s the country’s 13th most populated city and is perhaps best known to the public for its unique Christmas tradition. Every year, a large straw goat, known as the Gävleblocken (or “the Gävle Goat”), is erected in the centre of the city and then, in a more unofficial tradition, tends to get destroyed by the locals.

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Brexit – In or Out

That is the question concerning many expatriates at the moment. What a difference a few days can make to the whole issue, before Cameron went to the EU to try to negotiate with a group of people that dislike anything that could disrupt the status quo or threaten their position (no matter how valid the argument), it looked like the in vote had the upper hand. 

Since returning and announcing the referendum on 23rd June, people he once considered good friends, allies and colleagues who he could count on for support have decided to join the out camp and now this is gaining momentum.

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