Private Pension Release UK

[Mario666]

Dear all,

 

I am lucky enough to have a reasonable amount of funds in a private pension in the the UK....About 400k sterling.

 

However, if I wish to withdraw any of it ...it is taxed at source as it is treated as PAYE income.

 

Does anyone know if this can be claimed back if UK Non-Resident and also if I take the lot where Offshore might be a good pace to put it.

 

I understand if you do not want to reply openly, but please feel free to PM me.

 

Many thanks,

 

M

 

 

[Antonymous]

Your drawdown will be taxed, but after deduction of your personal allowance.

 

Yes, you can claim back the tax paid if you are registered as a non-resident of the UK for tax purposes. That means you will have a tax code that relates to this.

 

Once you receive the drawdown, obtain a P45 from the pension provider. Send this together with Form R43 to PAYE HMRC. You should receive the tax back within six weeks if all goes well.

 

 

 

 

[denby45]

1 hour ago, Antonymous said:

Your drawdown will be taxed, but after deduction of your personal allowance.

 

Yes, you can claim back the tax paid if you are registered as a non-resident of the UK for tax purposes. That means you will have a tax code that relates to this.

 

Once you receive the drawdown, obtain a P45 from the pension provider. Send this together with Form R43 to PAYE HMRC. You should receive the tax back within six weeks if all goes well.

 

 

 

 

Sorry but I believe you are not correct about being able to claim the back tax. You can withdraw about 15,000 per year to avoid the tax altogether providing you have no other UK income. The 15,000 is made up of your 25% tax free and personal allowance. You will of course still pay the tax upfront.

 

Also for the OP before you start to withdraw your pension you should first find out what your guaranteed annuity rate is. For example I started a PP in Feb 1987. The guaranteed annuity rates are 95.80, 109.20 and 127.90 per 1,000 at 60, 65 and 70 years of age respectively. I consider I would be a fool to cash that in based on today's rates.

 

Den 

[Dene16]

you should be able to take 25% as a tax free sum on each pension if you have not already drawn on them.

Antonymous has assumed you will take a draw down pension, nothing  he says is incorrect but you may not need to do it in this manner

It may well be the best way to do things but after you have taken the tax free sum

Not sure about claiming the tax back

Edited March 3, 2018 by Dene16
new information

[denby45]

"you should be able to take 25% as a tax free sum on each pension if you have not already drawn on them. "

 

You claim 25% tax relief every time you do a draw down. It has absolutely nothing to do with "if you have not drawn down on them" Please don't give advice if you don't know the facts.

 

and I will repeat what I said before you cannot claim tax back relating to your non residency

 

For the OP how did you manage to continue your pension after declaring non residency? Normally your plan provider will put it to "paid up" status. 

 

 

Den 

 

 

Edited March 3, 2018 by denby45

[barry1312]

To give a bit of clarity here you are allowed when you first disburse a pension 25% tax free lump sum, the balance of your pension is taxed at whatever your personal tax rate will be so as a guideline for a single person between 20 and 40  percent tax, of which you should be allowed to claim back tax on your personal allowance, for a single person, currently, it is just over 10,000 GBP per Annum

 

Under the pension reform act you are allowed to take your tax free lump sum and and disburse a percentage of your pension each year to keep from paying unecessary tax so first year 25% tax free lump sum and your annual tax free allowance which you can reclaim from HMRC and then each year the relevant tax free allowance

 

Problem is though that most UK pension companies for some unknown reason are not adhering to the pension reform act for expats, so you should be ok with the above if you are still registered as living in the UK with your pension company if not they'll probably make you take the whole amount in one go so you'd have to find a pension provider who does allow you to use the reform act guidelines and transfer your pension to them, they are pretty few and far between at present I only know of one SIPP provider that will do that for expats but I'm sure there must be more

 

I hope that's a bit clearer for you

[Dene16]

8 minutes ago, denby45 said:

You claim 25% tax relief every time you do a draw down. It has absolutely nothing to do with "if you have not drawn down on them" Please don't give advice if you don't know the facts.

It does hot change the fact that he can claim a 25% tax free lump sum on the whole sum regardless of draw down or not

I do know the facts as i am in the process of doing it now

If you cannot give unbiased advice don't give it

Thank you barry1312 for making it clearer

Edited March 3, 2018 by Dene16
new info

[Chongalulu]

You are allowed to take 25% of value of this (so £100k) as a tax free lump sum,and same with any additional pensions . The tax on taking the rest as a lump sum is very high (around 50% I think) so to try and reinvest a considerably reduced sum to even match that return makes no sense. You can ,if that £100k is not enough,take a drawdown from the remaining amount leaving it invested,or use it to buy an annuity (rates are very unattractive at the moment) for life. You will have to pay tax on ANY UK income above your personal allowance of £11500. You cannot reclaim it because you are non resident. 

[denby45]

7 minutes ago, Dene16 said:

It does hot change the fact that he can claim a 25% tax free lump sum on the whole sum regardless of draw down or not

I do know the facts as i am in the process of doing it now

If you cannot give unbiased advice don't give it

Oh dear instead of apologizing to the OP for giving misleading advice you then give another statement (which is correct this time) and act as if it qualifies your earlier completely incorrect statement. Then you have a go at me for giving biased advice. 

 

Biased towards what I may ask.

 

Den

[Tidybeard]

Tax is tricky and depends so much upon your personal situation and history .... but I would get a pension adviser who specializes in Expat pensions and then ask them to look into QROPS and Personal Portfolio Bonds PPB's. 

 

These are mechanisms that allow you to take all of your funds and place them offshore in an investment tax wrapper, so making withdrawals tax free in the future.   

 

Once you have been outside of the UK for 5 years ... all sorts of options become available ... you need to look into them !

 

 

[Dene16]

22 minutes ago, denby45 said:

Oh dear instead of apologizing to the OP for giving misleading advice you then give another statement (which is correct this time) and act as if it qualifies your earlier completely incorrect statement. Then you have a go at me for giving biased advice. 

Deary deary me, another old grump that needs his argument for the day

Having re read my statement i fail to see your argument.

No where does he mention a draw down pension, only requiring a certain sum of money (unknown)

When the government changed the law i met many people who then thought they could change their pension, even though they had already started drawing on it

My statement dictates that he has options other than a draw down pension(I know i did not say that directly but presumed that was obvious) as he would have 25% tax free

Very sorry if that was not in your ability to comprehend as you seem fairly articulate

I could of gone into it with a fine tooth-comb as i was made redundant from a very large company,thus had to sit through a multitude of seminars including the HMRC to determine all our options 

 

 

[Mario666]

3 hours ago, Antonymous said:

Your drawdown will be taxed, but after deduction of your personal allowance.

 

Yes, you can claim back the tax paid if you are registered as a non-resident of the UK for tax purposes. That means you will have a tax code that relates to this.

 

Once you receive the drawdown, obtain a P45 from the pension provider. Send this together with Form R43 to PAYE HMRC. You should receive the tax back within six weeks if all goes well.

 

 

 

 

Many thanks!

[Mario666]

1 hour ago, Tidybeard said:

Tax is tricky and depends so much upon your personal situation and history .... but I would get a pension adviser who specializes in Expat pensions and then ask them to look into QROPS and Personal Portfolio Bonds PPB's. 

 

These are mechanisms that allow you to take all of your funds and place them offshore in an investment tax wrapper, so making withdrawals tax free in the future.   

 

Once you have been outside of the UK for 5 years ... all sorts of options become available ... you need to look into them !

 

 

Thanks for your reply.

 

I have a friend who is based in Abu Dhabi and he went down the QROPS route.

 

He only gets about 2% income p.a.  on his investment by the time the "Management Fees" have been taken out so he advised me against it.

 

I have been officially non-Resident for over 5 years for tax purposes.

 

I have already taken my 25% tax free sum and I am talking about the remainder.

 

I am worried that if the tax laws re pensions change again, e.g., if Labour win the next election it could have a very negative impact on me.

 

If I have already taken the whole amount out and reclaimed the "Taxed at source" monies I would want to move them offshore to a tax haven which hopefully would mean it was protected.

[Antonymous]

Op, it would be prudent to close your private pension if you have another good investment prospect. There is a financial crisis on the horizon, with pension funds being unable to make sufficient profits to cater for future payouts. This is due mainly to the low interest rates policy of the past years.

 

In Britain, two out of three pension funds are in the deficit. In total, some 3,710 pension schemes are in deficit according to the Pension Protection Fund watchdog. Pension schemes are falling apart and there are zero guarantees that you’ll be able to receive an income from them in years ahead.

 

In effect many pension funds are nothing other than Ponzi schemes now. This is the reason why I closed my PP and reinvested in assets in Thailand that have been appreciating at considerably higher rates than my PP was achieving previously.

 

Your pension fund may first need to convert your fund to a withdrawal transfer plan (called different things by different providers). Check that with them first – it is easily done.

 

I recommend that you call the HMRC helpline. They are very efficient and helpful. You will find that if the conditions I mentioned apply to you (I think they do), you CAN reclaim tax paid after you close your PP. The form you need to do this is R43 and you’ll need that P45.

[Mario666]

13 minutes ago, Antonymous said:

Op, it would be prudent to close your private pension if you have another good investment prospect. There is a financial crisis on the horizon, with pension funds being unable to make sufficient profits to cater for future payouts. This is due mainly to the low interest rates policy of the past years.

 

In Britain, two out of three pension funds are in the deficit. In total, some 3,710 pension schemes are in deficit according to the Pension Protection Fund watchdog. Pension schemes are falling apart and there are zero guarantees that you’ll be able to receive an income from them in years ahead.

 

In effect many pension funds are nothing other than Ponzi schemes now. This is the reason why I closed my PP and reinvested in assets in Thailand that have been appreciating at considerably higher rates than my PP was achieving previously.

 

Your pension fund may first need to convert your fund to a withdrawal transfer plan (called different things by different providers). Check that with them first – it is easily done.

 

I recommend that you call the HMRC helpline. They are very efficient and helpful. You will find that if the conditions I mentioned apply to you (I think they do), you CAN reclaim tax paid after you close your PP. The form you need to do this is R43 and you’ll need that P45.

Thanks for your feedback A.

 

I am very worried about changes in Pension/tax laws....also worried about Brexit leading to further drops in Sterling value and agree entirely about many UK pension funds being volatile.

 

That is why I am eager to withdraw as much of it as I can and get it out of the country and out of Sterling.

 

But if I withdrew the whole amount the initial tax at source would be huge as most of it would be taxed at the highest rate, i.e., 45%....If I could not then claim it back I wouldn't be a happy bunny!

 

That's why I asked if anyone else had already been through this loop.

[barry1312]

Just to respond to Tidybeards post, the law has changed on QROPS and if you transfer out of the UK now you will pay all your tax up front on transfer so only really an option if you choose to take tax on your pension at 400,000 K and then let it grow for 20 odd years and not pay tax on the interest unless the laws change during that period!!!

 

PPb's aren't a realistic option as you generally have to keep monies transfered in them for 5-7 years or you will get a penalty for withdrawing before that of up to 7% and you still have the problem of either transfering into them as a QROP and paying the tax or encashing and paying the tax, a SIPP though will not have that problem and can generally invest those via internet platforms similar to Internaxx or Interactive, please note I said similar not definately with them as I don't know first hand they accept sipps but certainly some do.

 

You may also be able to invest a SIPP via a PPB not 100% certain but be aware PPB's are expensive and have lot's of hidden costs even if on face value they appear cheap

[Mario666]

3 minutes ago, barry1312 said:

Just to respond to Tidybeards post, the law has changed on QROPS and if you transfer out of the UK now you will pay all your tax up front on transfer so only really an option if you choose to take tax on your pension at 400,000 K and then let it grow for 20 odd years and not pay tax on the interest unless the laws change during that period!!!

 

PPb's aren't a realistic option as you generally have to keep monies transfered in them for 5-7 years or you will get a penalty for withdrawing before that of up to 7% and you still have the problem of either transfering into them as a QROP and paying the tax or encashing and paying the tax, a SIPP though will not have that problem and can generally invest those via internet platforms similar to Internaxx or Interactive, please note I said similar not definately with them as I don't know first hand they accept sipps but certainly some do.

 

You may also be able to invest a SIPP via a PPB not 100% certain but be aware PPB's are expensive and have lot's of hidden costs even if on face value they appear cheap

Thanks Barry.....I have already discounted the QROPs route anyway.

 

As for planning on anything for "20 odd years" I am already 60 and might not be doing anything at all in 20 odd years time .....If you get my drift...

[denby45]

5 hours ago, Dene16 said:

Deary deary me, another old grump that needs his argument for the day

Having re read my statement i fail to see your argument.

No where does he mention a draw down pension, only requiring a certain sum of money (unknown)

When the government changed the law i met many people who then thought they could change their pension, even though they had already started drawing on it

My statement dictates that he has options other than a draw down pension(I know i did not say that directly but presumed that was obvious) as he would have 25% tax free

Very sorry if that was not in your ability to comprehend as you seem fairly articulate

I could of gone into it with a fine tooth-comb as i was made redundant from a very large company,thus had to sit through a multitude of seminars including the HMRC to determine all our options 

 

 

Do you always revert to slagging people off when you made a mistake and they bring your attention to it? I am still waiting for you to give the example of my biased information. Where is it?

It appears you still cannot see that your statement  "you should be able to take 25% as a tax free sum on each pension if you have not already drawn on them. " is completely wrong or you just don't want to admit to the fact.

 

Perhaps you are one of those people who are never wrong or ever make a mistake. In that case I apologize. 

 

In my case I have already claimed once my 25% tax free on the initial pension sum I withdrew last year. Now next tax year when I cash in a further part of my pension I will remember your words and for sure I will not claim the 25% tax free sum. 

Thank you for that invaluable information.

This conversation is now dead and you may move on to whoever else you may want to slag off should they be unlucky enough to correct you.

 

Den

 

[MaeJoMTB]

On 3/2/2018 at 3:59 PM, Mario666 said:

I am lucky enough to have a reasonable amount of funds in a private pension in the the UK....About 400k sterling.

Transfer to Hargreaves Lansdown (don't tell them you are living outside the UK or they won't accept you as a client.

Everyone else stole money from me ........... these guys appear honest.

 

Paying the tax is usually cheaper than paying the crooks.

PS. watch out for scammers, IFA working outside the UK, management company UK, investment broker IOM etc, they like to divide between 3 countries so you play the who is responsible for oversite game after stealing.

Edited March 3, 2018 by MaeJoMTB

[Dene16]

16 hours ago, denby45 said:

In that case I apologize. 

Thank you i accept your apology 

[Oxx]

On 03/03/2018 at 6:29 PM, MaeJoMTB said:

Transfer to Hargreaves Lansdown ........... these guys appear honest.

 

They were found guilty of malpractice a few years ago and heavily fined.

[Cranky]

Pay no attention to any answers on any forum.  If you want proper advice you must go to a regulated, qualified financial advisor in the UK and pay for the advice - it is money well spent.  Check their credentials, license and that they are regulated by the FCA.  

 

Is the pension a Defined Benefits scheme?  If so, it may be better left where it is, only a full report by qualified advisors will give you an accurate opinion.

 

Do not listen to any 'IFA's' offshore as they will undoubtedly try to flog you the same 'advice' everyone gets - a QROPS inside a life company 'Portfolio Bond' and then invest it all in Structured Notes or commission generating funds.  Dodgy offshore IFA's giving 'free' advice earn up to 13% or more from the value transferred which you pay.  Plus there will be a tax on the transfer under new laws last year if you reside outside the EU.

 

PLEASE DO NOT rush this, HMRC is a good place to start - you can't claim back tax.  You will have received tax relief on the contributions so HMRC want their slice back with interest.

 

Sterling has steadied following Brexit.  The thing with currencies (particularly mainstream ones) that most people overlook is that they rarely stay either over, or undervalued for very long for many reasons too long to go in to here so don't panic on that front.  Check out the PPP (Purchasing Power Parity) index.

 

Most people focus on the benefits of getting their hands on the cash today and fail to pay attention to the investment strategy and risk profile of the remainder - the bit that provides an income for life - quite important.

 

 

 

[Oxx]

2 hours ago, Cranky said:

Pay no attention to any answers on any forum.  If you want proper advice you must go to a regulated, qualified financial advisor in the UK and pay for the advice - it is money well spent.

 

But almost impossible to obtain.  There are virtually no IFAs who will currently take on non-resident clients (I only know of one), and they have been kicking out clients who have become nonresident with alacrity, despite years of relationship.  Furthermore, the minimum assets to be eligible to be a client have increased dramatically.

 

So, nice advice, but really utterly impractical.

[Cranky]

13 minutes ago, Oxx said:

 

But almost impossible to obtain.  There are virtually no IFAs who will currently take on non-resident clients (I only know of one), and they have been kicking out clients who have become nonresident with alacrity, despite years of relationship.  Furthermore, the minimum assets to be eligible to be a client have increased dramatically.

 

So, nice advice, but really utterly impractical.

Almost, but not impossible as I know several that will do it.  Certainly worth the effort given the stakes. The reason speaks volumes on Pension Transfer business as the field is fraught with danger as UK IFA's can be sued for giving bad advice no matter how well intentioned so most avoid it;   'Offshore' unregulated cowboys have no fear of this.  The good news is that most providers will not accept business from said cowboys unless it has a 'rubber stamp' from a regulated UK firm that is paid for (around 1,000 quid for a decent report).  This is a direct result of thousands of expats having been fleeced out of their pensions over the past ten years or so, since the creation of QROPS.  (search for LM, Axiom pension scandals). 

 

Bad news is that so many people have been conned during those years and the UK Gov. did absolutely nothing to prevent it by allowing any Tom or Dick to play fund manager and place investors in the highest commission paying rubbish on the planet.  Millions of pounds has been trousered by these thieves operating out of unregulated markets under the guise of Pension Transfer Specialists.  

 

Even worse is that all pension transfers are held by a small number of Trust Companies that are duty bound to (a) comply strictly in line with the UK HMRC rules with regard to withdrawals etc. and (b) act in the best interests of the investor.  'B' is the issue as they are the ones that allowed unregulated, unqualified 'advisors' to place client monies in to a load of crap.  These companies are now pooping themselves as hundreds of law suits involving many millions are being prepared to go after them for compensation.  I wish them luck.

 

 

 

 

[Oxx]

37 minutes ago, Cranky said:

Almost, but not impossible as I know several that will do it.

 

Perhaps you'd care to share the list of names? I'm sure it would help many people.

[Cranky]

1 hour ago, Oxx said:

 

Perhaps you'd care to share the list of names? I'm sure it would help many people.

Happy to, just send me a PM and I'll recommend an appropriate firm - don't think we're allowed to promote firms here

[Mario666]

On 3/6/2018 at 2:47 AM, Cranky said:

Pay no attention to any answers on any forum.  If you want proper advice you must go to a regulated, qualified financial advisor in the UK and pay for the advice - it is money well spent.  Check their credentials, license and that they are regulated by the FCA.  

 

Is the pension a Defined Benefits scheme?  If so, it may be better left where it is, only a full report by qualified advisors will give you an accurate opinion.

 

Do not listen to any 'IFA's' offshore as they will undoubtedly try to flog you the same 'advice' everyone gets - a QROPS inside a life company 'Portfolio Bond' and then invest it all in Structured Notes or commission generating funds.  Dodgy offshore IFA's giving 'free' advice earn up to 13% or more from the value transferred which you pay.  Plus there will be a tax on the transfer under new laws last year if you reside outside the EU.

 

PLEASE DO NOT rush this, HMRC is a good place to start - you can't claim back tax.  You will have received tax relief on the contributions so HMRC want their slice back with interest.

 

Sterling has steadied following Brexit.  The thing with currencies (particularly mainstream ones) that most people overlook is that they rarely stay either over, or undervalued for very long for many reasons too long to go in to here so don't panic on that front.  Check out the PPP (Purchasing Power Parity) index.

 

Most people focus on the benefits of getting their hands on the cash today and fail to pay attention to the investment strategy and risk profile of the remainder - the bit that provides an income for life - quite important.

 

 

 

Thank you Cranky for your well reasoned comments with which I concur 90%....I do not disagree with anything, but still have some doubts.

 

I am not "panickicking" but looking to move with reasonable haste due to the reasons and concerns in my post.

 

I have an excellent IFA who is my best friend from school and he has many prestigious business and sports personalities as customers based

 

in Manchester. He owns the company I deal with and has various specialists in his employ for Pensions, etc. so I trust him implicitly.

 

I also use a well respected accountant, but neither can provide the information I require at this time.

 

I am about to test the system by deliberately going over a tax threshold marginally this year and see if I can claim back the income tax (taxed

 

at source from pension) when I do my tax return in April.

 

I still have to pay tax on income from my UK property rentals, but I know that is entirely different.

 

Does anyone know for sure what the situation is for expats with UK pensions?....Non-resident 8 years now for tax purposes.

 

Has anyone already done what I am trying to do?

 

Many thanks for all your replies to date.
 

I will keep the Forum posted when I have any news.

 

 

 

 

 

[denby45]

On 3/6/2018 at 3:42 PM, Cranky said:

Happy to, just send me a PM and I'll recommend an appropriate firm - don't think we're allowed to promote firms here

Fry Group are in my opinion excellent.

 

Den

[Mario666]

On 3/20/2018 at 3:07 AM, denby45 said:

Fry Group are in my opinion excellent.

 

Den

Thanks Den.....I am going do my tax return ASAP after April 6th and see what happens.

 

I don't know of The Fry Group but will Google them.

 

For some reason I am unable to PM anyone at the moment, but will keep you posted.

 

Cheers,

 

M

[Cranky]

On 3/7/2018 at 2:17 PM, Mario666 said:

Thank you Cranky for your well reasoned comments with which I concur 90%....I do not disagree with anything, but still have some doubts.

 

I am not "panickicking" but looking to move with reasonable haste due to the reasons and concerns in my post.

 

I have an excellent IFA who is my best friend from school and he has many prestigious business and sports personalities as customers based

 

in Manchester. He owns the company I deal with and has various specialists in his employ for Pensions, etc. so I trust him implicitly.

 

I also use a well respected accountant, but neither can provide the information I require at this time.

 

I am about to test the system by deliberately going over a tax threshold marginally this year and see if I can claim back the income tax (taxed

 

at source from pension) when I do my tax return in April.

 

I still have to pay tax on income from my UK property rentals, but I know that is entirely different.

 

Does anyone know for sure what the situation is for expats with UK pensions?....Non-resident 8 years now for tax purposes.

 

Has anyone already done what I am trying to do?

 

Many thanks for all your replies to date.
 

I will keep the Forum posted when I have any news.

 

 

 

 

 

Seems to me you are asking questions till you get the answer you like.  Stick with your regulated friend and accountant - assuming they are regulated and qualified.

 

To my knowledge, if you exceed your limits and lie on your tax return you are asking for trouble, particularly if you have UK assets the HMRC an seize.   If the pension plan is UK based they will refuse your request to break the law anyway so I can't see how you will benefit.  HMRC will simply refuse the rebate - unless of course you are indeed eligible. 

 

Good luck.