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UK DC Pensions - Options for Non-UK residents

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I have DC pension pot of approx. £38,000 and up until now was assuming I'd leave it with the pension provider and take an annuity however now I've started reviewing the paperwork it seems this option is not available for Non-UK Residents so was wondering what other's have done in this situation. 

 

All my addresses with the pension provider & Company I worked for (which is also my UK Bank) are my Parents address so can I just claim that as my residential address based on the fact that I'm not a Legal resident of Thailand even though I live here as the UK is the only country where I have the legal right to be resident.

 

I'm not UK Tax Resident (haven't been for 17 years) but Tax Residency is not the same as being Legally resident somewhere.

Purchasing a UK annuity is difficult (perhaps impossible) if you're not resident in the UK.

 

You can take a 25% lump sum - GBP 9,500 - tax free.  That leaves GBP 28,500.  If you withdraw this, it will be subject to UK income tax at normal rates.  Assuming no other UK income, that would be GBP 3,184.20 tax.

 

You could then invest the proceeds offshore, and so outside the grasping hands of the UK tax man.

 

p.s. Your use of the term "legal resident" is confusing.  What matters is where you're tax resident.  You are tax resident in Thailand if you stay here 180 days or more in a calendar year.

  • Author
12 minutes ago, Zaphod Priest said:

Purchasing a UK annuity is difficult (perhaps impossible) if you're not resident in the UK.

 

You can take a 25% lump sum - GBP 9,500 - tax free.  That leaves GBP 28,500.  If you withdraw this, it will be subject to UK income tax at normal rates.  Assuming no other UK income, that would be GBP 3,184.20 tax.

 

You could then invest the proceeds offshore, and so outside the grasping hands of the UK tax man.

 

p.s. Your use of the term "legal resident" is confusing.  What matters is where you're tax resident.  You are tax resident in Thailand if you stay here 180 days or more in a calendar year.

Thanks for your reply,  I was trying to avoid taking it all as cash due to the Tax, but I would Guesstimate this would take this tax year's taxable income (Excluding Dividends/Gilt Interest which are treated as Disregarded income) to around £40K so would pay £5,484.20 in tax which is not as bad as I had in mind + I would end up paying this overtime if I were to do something like go down the Draw Down/UFPLS route anyway.

 

Added to this, I do have a Defined Benefit pension with the same Company from the 1st 20 Years I worked there as well as passive rental/dividind/guilt income so taking the lump sum upfront in lieu of losing approx. £150 per month is starting to feel like a no-brainer.

 

 

Is it easy to just take it all in cash? I've asked the pension company for the applcation forms but all they've sent me is the stuff about PensionWise and the fact that HUB should have contacted me 2 months ago. 

 

2 hours ago, Zaphod Priest said:

Purchasing a UK annuity is difficult (perhaps impossible) if you're not resident in the UK.

That really surprises me but I don't doubt you may be right as not looked into it for a DC pot.

1 hour ago, SamSpade said:

Is it easy to just take it all in cash? I

Not sure there is something about having to get financial advice over a certain level?

May be worth first having a chat with the PensionWise people - I think they have an online chat option.

  • Author
1 hour ago, topt said:

Not sure there is something about having to get financial advice over a certain level?

May be worth first having a chat with the PensionWise people - I think they have an online chat option.

I think Financial Advice is only mandatory if you're transferring >£30K out of a Defined Benefit Pension but I will speak to PensionWise when I'm in the UK next month. 

 

  • Popular Post
49 minutes ago, SamSpade said:

I think Financial Advice is only mandatory if you're transferring >£30K out of a Defined Benefit Pension but I will speak to PensionWise when I'm in the UK next month. 

 

Most Uk financial advisors will not give financial advice to people living outside the UK.

 

Don't forget you will need to have a credit check in order to receive your company pension.

Which is only available for people living in the UK.

 

The more you tell financial services you live outside the UK, the harder things will get.

Tell them you're living with your parents and you will have no problems.

  • Author
2 hours ago, BritManToo said:

Most Uk financial advisors will not give financial advice to people living outside the UK.

 

Don't forget you will need to have a credit check in order to receive your company pension.

Which is only available for people living in the UK.

 

The more you tell financial services you live outside the UK, the harder things will get.

Tell them you're living with your parents and you will have no problems.

There's no mention of a Credit Check (You have to agree to a Security identification Check) & they've not asked if I live outside of the UK for my Defined Benefits pension so I'm going to carry on with my Parent's address.

 

I'm going to take the cash for the DC pension, I'm not concerned about Credit Checks as I still file a UK Tax Return every year showing a pretty decent UK Passive income & have no debts, but I will run it by PensionWise & tell them I'm non-UK Resident for tax to get their sign-off that the extra 6,500 THB pm won't materially impact my lifestyle. 

 

HMRC already know I'm non-UK Tax Resident (for 17 years), it benefits me as it means I don't pay additional tax on my UK Dividends/Gilt interest or Capital Gains from shares + I managed to swap 2 years of UK PAYE at Higher Tax Rate for 12% Tax in Singapore when I 1st moved there which that was nice 🙂 

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