In today's highly taxed economic environment, it may please you to know that The Overseas Pension QROPS is free of all Guernsey tax for non-Guernsey residents. That means no Guernsey: income, capital gains or inheritance tax (Guernsey does not have VAT).

With regard to Guernsey and pensions there is no: Lifetime allowance recovery charge and no tax on death. An altogether more agreeable state of affairs.

Guernsey residents will be liable to local taxation.

Tax free cash

The Overseas Pension QROPS is able to pay 25% of the fund as a tax-free lump sum. Subject to tax rules in your country of residence.

Income tax

Transferring to The Overseas Pension QROPS ensures that, if tax is due on pension income, it will only be taxable in your country of residence. No tax is payable in Guernsey for non-residents* thus avoiding the potential problem of double taxation.

If you are non-UK resident and you draw an income from your UK pension it remains subject to UK tax, unless a double tax treaty exists between the UK and your country of residence. This can result in tax being charged at a rate higher than the top rate of tax in your country of residence. We recommend that you take tax advice in your country of residence.

The Overseas Pension can potentially grow free of UK and Guernsey tax (with the exception of tax on dividends from shares in certain countries). For example, if your QROPS holds money in a deposit account, it can receive interest without paying tax.

*Provided that tax relief was not received in Guernsey on the contributions made to the pension.

Capital gains tax

No capital gains tax is payable on gains made within The Overseas Pension QROPS.

Inheritance tax

For UK pensions the tax on death can be as high as 82% if you die after commencing benefits. However there are no inheritance tax or unauthorised payment charges in Guernsey if you transfer your pension to The Overseas Pension QROPS.

One planning option is to establish a trust into which death benefits would be payable from the QROPS. Potential beneficiaries could be your spouse and children.

See Death benefits for further information.

You should take individual tax advice in your country of domicile and/ or residence.