Bangkok, Thailand -- (SBWIRE) -- 09/20/2013 -- British expats living in India or wishing to retire in India can now transfer their pension into a QROPS India to maximize pension tax relief. Also, any Indian born residents in the UK who move back to India can also transfer their pensions and avoid UK income taxes in the UK.
British expats living in India can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like Malta and will no longer have to pay UK taxes on their pension if they stay offshore.
Indians who have worked in the UK can also transfer to a QROPS. Many Indian nationals spend time working abroad. Whilst working in the United Kingdom, pension benefits may accrue via employers’ occupational or personal pension schemes. Indian nationals who have worked in the UK can also transfer their pension to India via a QROPS in order to avoid UK taxes on their pension. This enables them to pass the entire pension onto their loved ones rather than face a 55% tax in the UK.
Tax on a QROPS India
What taxes do I have to pay on my pension in India?
Under section 9(1)(iii), pension accruing is taxable in India only if it is earned in India. So, if you are a UK expat or an Indian national who has worked in the UK, you can transfer your pension via a QROPS and avoid UK taxes and Indian personal income tax on your pension.
However, if the person becomes ‘ordinarily resident’ and has lived in India for 9 out of the last 10 years, the income may be taxable.
For the majority, your pension will be paid gross, normally out of a safe jurisdiction such as Malta which is an EU sovereign state, but will be paid tax free in Malta. You can then elect to have it paid into an Indian bank account or paid into an offshore bank account.
Most Indian based QROPS will restrict tax free cash to 33% with the residual fund being used to purchase a compulsory annuity. Therefore, a jurisdiction such as the Malta may be a better jurisdiction and allow more flexibility and freedom of investment to maximize your pension pot.
Why live or retire in India as a British expat?
Britain maintained strong links with India after the British East India Company arrived in the 18th Century. A former British colony, the Indian economy has now become the world’s 10th largest economy by nominal GDP and 4th largest economy by purchasing power parity. Following market-based economic reforms in 1991, India has become one of the fastest growing major economies and is considered a newly industrialized country. However, it continues to face the challenges of poverty, illiteracy, corruption and inadequate public health. A nuclear weapons state and a regional power, it has the third-largest standing army in the world and ranks tenth in military expenditure among nations.
It is estimated that 32,000 Brits live in India. Many Indians who have worked in the UK or Indians born in the UK and worked there all their life choose to retire back to India as well.
About QROPS Specialists
QROPS Specialists provide a comprehensive service for clients wishing to transfer their UK pension to a Qualifying Recognised Overseas Pension Scheme (QROPS).
We provide independent and fiduciary advice to our clients. We aren’t tied to any one pension company or provider, so we can genuinely find the best scheme to suit your preferences. QROPS specialists are experts in the field and will bring you constant news and updates concerning UK pension transfers abroad.
For enquiries, please send email to email@example.com
QROPS India for British expats article written by QROPS Specialists