A Client is aged 65 and lives in France and has done so for more than 5 full UK tax years.
The client has no intention to return to the UK.
The client wishes to take the maximum Pension Commencement Lump Sum (PCLS) and immediately draw an income from the remaining pension fund.
The existing UK pension scheme is a Money Purchase Scheme and does not have any guarantees attached to it.
The client is being charged 1% per annum plus annual fund management charges by their UK provider and the pension has a transfer value of £200,000.
In the event the client passes away they wish their pension fund to pass as a lump sum to their spouse. Were they to pass away after crystallising their pension, by taking the PCLS, the fund would be subject to a 55% UK tax charge before being passed on to their widow/widower.

Following a detailed analysis of their UK scheme, including the cost and tax implications, the client decides to go ahead with a transfer under the QROPS provisions to a Malta registered and recognised provider.

The QROPS costs are £895 for the set up fee and £895 per annum (in some cases these fees can be less).
The investments are administered for a cost of 1% per annum plus annual fund management charges.
The client receives 30% of their pension pot as a  PCLS, which is taxed in France at a rate of 7.5%. Had the client left their pension in the UK, they would be able to take only 25% PCLS and it would still be taxed in France.
He then draws an income of 120% of UK GAD rates, which is paid to them gross by the Maltese QROPS provider, as Malta has a Double Taxation Treaty in place with France. Then they declares this income on his French Tax return.
The funds used in their portfolio are all purchased without initial charges or commissions. These funds are all daily traded and none are subject to any penalty charges if they are sold.
The funds purchased to provide income are managed by some of the very top investment houses in the business; for example,  BlackRock, JP Morgan Asset Management , Jupiter Asset Management, Kames Capital and Henderson Global Investors.

Cons:

• The additional costs are only the £895 set up fee and an £895 annual charge.

Pros:

• The client has been able to withdraw an additional 5% of the fund as a PCLS.
• Upon death the client’s pension pot will pass in its entirety to their widow or widower.
• The client is able to mitigate potential currency risks.
• Increased Flexibility (i.e. a normal Personal Pension Plan does not allow drawdown)
• Consolidation of pension plans making them easier to manage