QROPS in India - Transfer UK Pension to India

QROPS stands for Qualifying Recognised Overseas Pension Scheme. It is a tax-efficient way for Non-Resident Indians (NRIs) to access their UK pension savings. QROPS allows UK pension funds to be transferred to a registered pension scheme in India.

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What is the full form of QROPS – India?

The full form of QROPS is Qualifying Recognized Overseas Pension Scheme. It is a type of overseas pension scheme that is registered with the UK tax authorities (HMRC) and meets certain requirements. 

What is QROPS - India?

QROPS is a pension transfer arrangement for NRIs holding their pension fund in the United Kingdom (UK) and who wish to move their pension to India. 

In India, QROPS allows you to transfer your UK pensions to Indian pension schemes that meet certain criteria set by HM Revenue and Customs (HMRC) in the UK. 

This enables the NRIs who have worked in the UK to consolidate their pensions in India, offering potential tax benefits and greater flexibility in managing retirement funds.

Tax Benefits of QROPS Scheme

  • Tax-free lump sum transfer: Up to 25% of the transferred amount can be withdrawn as a tax-free lump sum.

  • Tax-free growth: The remaining amount grows tax-free within the QROPS scheme.

  • Tax-free annuity: Under certain conditions, the annuity received can be tax-free in India.

Other Benefits of QROPS in India

The key benefits of investing in QROPS scheme in India are listed below:

  • Tax Benefits: QROPS schemes offer tax advantages for NRIs leaving the UK and transferring their pensions to India.

  • Investment Flexibility: These schemes provide a wide range of investment options tailored to individual preferences and risk profiles of the NRI.

  • Currency Options: NRI pension holders can choose to receive benefits in various currencies, which enhances flexibility for NRI retirees.

  • Regulation and Oversight: QROPS schemes in India are regulated and overseen by Indian financial authorities to ensure compliance with local laws.

  • Portability: Pension funds can be easily transferred between QROPS schemes or jurisdictions, providing flexibility for retirees.

  • Retirement Options: In India, various retirement plans and annuity plans are available for NRIs, which include lump-sum withdrawals or regular income payments.

Best QROPS Scheme in India in 2024

The best QROPS (India) list is mentioned below:

  • ICICI Prudential QROPS Plan

  • Kotak Mahindra QROPS Plan

  • HDFC QROPS Plan

  • Birla Sun Life QROPS Plan

  • SBI QROPS Plan

  • Franklin Templeton QROPS Plan

  • PNB QROPS Plan

  • Canara HSBC QROPS Plan

  • IDBI Federal QROPS Plan

  • Axis QROPS Plan

Eligibility Criteria for QROPS - India

The information on eligibility criteria for QROPS (Qualifying Recognised Overseas Pension Scheme) in India is as follows:

  • Age: Between 18 and 75 years old.

  • Pension Fund: Hold an active UK pension fund.

  • Residence:

    • Indian citizen/ NRI/ PIO/ OCI cardholder.

    • Foreign nationals residing in India (subject to specific insurer's rules).

  • No Recent Withdrawals: No withdrawals from the UK pension fund in the past 5 years.

  • UK Residency Status:

    • Have already left the UK.

    • Intend to leave the UK within the next year and have valid proof.

Steps for QROPS Pension Transfer to India

Step 1: Choose a QROPS Provider:

Research and select an appropriate QROPS provider in India aligned with your investment goals.

Step 2: Inform your UK Pension Provider:

Notify your UK pension provider about your intent to transfer funds to a QROPS. They'll provide the necessary forms and information.

Step 3: Complete Transfer Forms:

Fill out required forms from both your UK pension provider and chosen QROPS provider, including CETV, transfer payout, lifetime allowance forms, and KYC documents.

Step 4: Submit Forms and Documents:

Submit completed forms and all necessary documents to both providers.

Step 5: HMRC Approval:

Obtain approval from HM Revenue & Customs (HMRC) in the UK, typically facilitated by your financial advisor.

Step 6: Fund Transfer:

Upon approval, your UK pension fund will be transferred to the chosen QROPS provider in India.

Documents Required to Transfer UK Pension to India

Following are the documents required for UK Pension Transfer to India via QROPS:

Category Document Description
Personal Information Passport Current passport with photo and signature page
PAN Card (India) Permanent Account Number card for tax purposes in India
Proof of Address in India Utility bill, bank statement, or other document with your Indian address
Pension Information UK Pension Scheme Statements Recent statements showing pension details and contributions
Transfer Request Form Provided by your UK pension provider
Tax Residence Certificate (India) Issued by Indian tax authorities confirming your residency
Tax Residence Certificate (UK) Issued by UK tax authorities confirming your non-residency
QROPS Transfer Approval (Optional) From HMRC if transferring to a Qualifying Recognized Overseas Pension Scheme (QROPS) in India
Financial Information Bank Details (India) Bank account information for receiving transferred funds
Foreign Account Tax Compliance Act (FATCA) Form (Optional) Required by some US-linked pension providers’

FAQ's

  • Can I transfer my UK pension to India?

    Yes, you can transfer your UK pension to India using a Qualifying Recognised Overseas Pension Scheme (QROPS). This allows you to transfer your entire pension pot or just a portion. However, keep in mind the tax implications and suitability for your individual circumstances.
  • What is the 5 year rule for QROPS?

    This rule states that you cannot access your QROPS benefits for 5 years after transferring your UK pension. Exceptions are made for severe ill health or death. This rule aims to prevent tax avoidance by transferring funds just before retirement.
  • Can I get my UK state pension in India?

    Yes, you can receive your UK state pension in India. However, the amount might be subject to taxation in both countries. Consult tax advisors in both India and the UK for specific details.
  • Can NRIs take pension plans in India?

    Yes, NRIs can invest in various pension plans in India, including National Pension System (NPS), Private pension plans, and Equity Linked Saving Schemes (ELSS). Each option has different features and tax implications.
  • How to transfer UK pension to India?

    Transferring your UK pension to India through QROPS involves several steps:
    • Choose a QROPS provider

    • Gather documents

    • Apply for QROPS transfer

    • Transfer funds

    • Invest your funds

  • Which pension scheme is best in India?

    There's no single best pension scheme. The ideal choice depends on your individual needs, risk tolerance, investment goals, and tax considerations. Consult a financial advisor for personalized recommendations.
  • What investments are permitted in QROPS?

    The specific investment options within a QROPS depend on the chosen provider. Generally, QROPS offer diverse options like equities, bonds, mutual funds, and property-related investments.
  • What is the difference between a QROPS and a SIPP?

    Both QROPS and Self-Invested Personal Pensions (SIPPs) offer investment flexibility, but they serve different purposes:
    • QROPS: Allows transferring UK pension funds overseas.

    • SIPP: Used for investing within the UK by UK residents.

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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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