Friday, 27 February 2015

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European Union Retirement Benefit Scheme (EURBS)

If you have an EU private pension, there are considerable benefits in transferring it into a EURBS (European Union Retirement Benefit Scheme).

What is a EURBS?

The free movement of persons is a fundamental right guaranteed to European Union (EU) citizens by the EU Treaties. The concept of free movement of persons came about with the signing of the Schengen Agreement in 1985 and the subsequent Schengen Convention in 1990, which initiated the abolition of border controls between participating countries.

The regulations are now in place to allow you to move your pension scheme to another EU jurisdiction such as Malta to enjoy the associated benefits.

Why Malta?

Care must be taken to ensure that the new jurisdiction is a well regulated, EU jurisdiction that would be covered by the EU pension directive.

With this in mind STM Trustees, the Trustee partners of Providence Life Limited, have designed their EURBS Trust, to comply with certain criteria under Malta Pension Law (the scheme is based in Malta) and to comply with UK HMRC requirements on pension provision as the UK is seen to have the most developed rules on pension transfers in the EU.

A EURBS pension scheme is an excellent option for people who have left, or are leaving the EU country in which they have built up pension rights. EURBS offer excellent flexibility, significant taxation and investment advantages and the opportunity to pass on the pension fund to beneficiaries on death.

EURBS benefits:

  • Greater control over where your pension fund is invested
  • Tax efficiency - you may be able to substantially reduce the tax that you would have to pay when accessing your pension, or on death
  • Inheritance benefits - you may be able to pass on your pension fund to your beneficiaries free of tax upon death
  • Freedom from EU IHT to align it to EU-registered schemes, following a new clause in the Inheritance Tax Act 1984
  • Simplicity, as numerous pensions can be consolidated in one EURBS
  • More chance to see your advisor face-to-face, as pension trustees or your scheme provider can be geographically closer to where you live
  • The possibility of helping your non-EU residency/domicile status with EU tax authorities, where necessary
  • Greater investment freedom
  • No requirement to buy an annuity and benefits can be paid in most currencies