Transferring Uk Private Pensions Offshore

[wordchild]

Let me nail my colours to the wall right from the outset. I am an IFA, resident in Thailand for 13 years, holding qualifications from the CII and currently studying to upgrade those qualifications to an even higher level. You will notice that I am a recent member (joined to keep abreast of red shirt activity) and that my posts are few. I only post when I have something to say. I was whittling away some time between world cup matches when I came across this thread.

Never before have I come across such a mixture of ignorance, bigotry and mis-information. Where to start?

Faramond - you could try to moderate your language. You're putting yourself up there to be shot down. Losing 82% of your pension pot on death is technically correct, but would be very rarely applied. 82% pre-supposes a liability to Inheritance Tax. Otherwise, it might be 0% or 35% or 70%, dependent on age. Readers - if you don't how this might affect you find an adviser who does!

Faramond - "the income dies with you". Never heard of a spouse's pension? You really don't need to overstate your case.

Chiang Mai - "the tax man will have you in the most unpleasant way". Nonsense. Moving back to the UK with a QROPS is tax neutral as long as you declare the income under self-assessment.

Chiang Mai - HMRC6. Have you actually read the thing? If so, I would suggest reading it again and understanding it instead of using it to justify your earler poor post.

Readers - if you don't understand the tax implications find an adviser who does!

jesimps and others - one theme in this thread seems to be a lack of understanding of final salary salary schemes/employer pension schemes. A final salary scheme is an employer sponsored scheme, but not necessarily vice-versa. An employer scheme might also be a Contracted In Money Purchase Scheme, a Contracted Out Money Purchase Scheme, an Executive Pension Plan or any one of several other variations. Readers, if you do not understand the differences and how they might affect a QROPS transfer, find an adviser who does!

Another theme that seems to bubble under the surface may be a lack of understanding of the distinctions between Ordinarily Resident, Non Resident, Provisionally Non Resident, Domiciled and Non Domiciled. Time and time again, I meet UK nationals who consider themselves non-domiciled simply because they have lived outside the UK for a long time. Wrong and potentially a very expensive mistake. The recent Gaines-Cooper case severely muddied the water in respect of the 90 day and 180 day rules. An intimate knowledge of this subject is absolutely central to successful tax and investment planning for a UK expat. This is one area where a qualified and experienced Bangkok based adviser will get it right far more often than a UK based adviser. We deal with it every day. The average UK based adviser will come across this issue rarely, if ever. Readers - if you do not know your true tax status find an adviser who does!

Guesthouse - dear oh dear oh dear!! Your post 2010-03-28 09.49. Point 1. Complete and utter rubbish!!! Worse than that, this is dangerous. Where did you turn up this little gem of a doozy? Nana Plaza? Let's get the facts straight. UK pensions are UK sourced income and are, except for some former government employees, subject to income tax under the PAYE system and will be deducted at source by the pension provider. No hiding from it.

Guesthouse - Same post, Point 2. Once again, you are quoting from that great pool of mis-information - hearsay. You heard (correctly) about a five year restriction but display total ignorance of its implications and when it is applied. Your bigotry blinds you to facts. You should refrain from posting mis-information that could severely damage people. You, more than any other poster in this thread need to find an adviser who does!

Guesthouse - "I doubt very much that the vast majority of expats in Thailand who are being targetted by QROPS salesmen have sufficient funds in their pensions by age 50 to attain a sustainable early retirement". Perhaps not amongst your circle of acquaintances.

Guesthouse - I resent being defined as a "carpet bagger" in the same way that you would resent being defined as a sex tourist purely on the basis that you live in Thailand (I assume).

Gambles - you must have the patience of a saint to moderate your language when faced with with the vitriol of some of these people. We both know just how much lack of knowledge and mis-information exists amongst UK expats in respect of successfuI planning, but you must be as surprised as I am at some people's willingness to display it in a public forum. I am quite sure that this is part of your marketing mix, but you cannot reason with ignorance and bigotry. This is my first and last post in this thread. Please, stop dignifying them and do the same.

As a marketing concept this is not a bad tactic - accuse everyone else of being an idiot and set yourself up as the resident "expert", brave and bold I say, should result in at least a couple of PM's and who knows, perhaps the odd bit of income, er I mean business!

or another one of gambles virtual friends!

[wordchild]

Let me nail my colours to the wall right from the outset. I am an IFA, resident in Thailand for 13 years, holding qualifications from the CII and currently studying to upgrade those qualifications to an even higher level. You will notice that I am a recent member (joined to keep abreast of red shirt activity) and that my posts are few. I only post when I have something to say. I was whittling away some time between world cup matches when I came across this thread.

Never before have I come across such a mixture of ignorance, bigotry and mis-information. Where to start?

Faramond - you could try to moderate your language. You're putting yourself up there to be shot down. Losing 82% of your pension pot on death is technically correct, but would be very rarely applied. 82% pre-supposes a liability to Inheritance Tax. Otherwise, it might be 0% or 35% or 70%, dependent on age. Readers - if you don't how this might affect you find an adviser who does!

Faramond - "the income dies with you". Never heard of a spouse's pension? You really don't need to overstate your case.

Chiang Mai - "the tax man will have you in the most unpleasant way". Nonsense. Moving back to the UK with a QROPS is tax neutral as long as you declare the income under self-assessment.

Chiang Mai - HMRC6. Have you actually read the thing? If so, I would suggest reading it again and understanding it instead of using it to justify your earler poor post.

Readers - if you don't understand the tax implications find an adviser who does!

jesimps and others - one theme in this thread seems to be a lack of understanding of final salary salary schemes/employer pension schemes. A final salary scheme is an employer sponsored scheme, but not necessarily vice-versa. An employer scheme might also be a Contracted In Money Purchase Scheme, a Contracted Out Money Purchase Scheme, an Executive Pension Plan or any one of several other variations. Readers, if you do not understand the differences and how they might affect a QROPS transfer, find an adviser who does!

Another theme that seems to bubble under the surface may be a lack of understanding of the distinctions between Ordinarily Resident, Non Resident, Provisionally Non Resident, Domiciled and Non Domiciled. Time and time again, I meet UK nationals who consider themselves non-domiciled simply because they have lived outside the UK for a long time. Wrong and potentially a very expensive mistake. The recent Gaines-Cooper case severely muddied the water in respect of the 90 day and 180 day rules. An intimate knowledge of this subject is absolutely central to successful tax and investment planning for a UK expat. This is one area where a qualified and experienced Bangkok based adviser will get it right far more often than a UK based adviser. We deal with it every day. The average UK based adviser will come across this issue rarely, if ever. Readers - if you do not know your true tax status find an adviser who does!

Guesthouse - dear oh dear oh dear!! Your post 2010-03-28 09.49. Point 1. Complete and utter rubbish!!! Worse than that, this is dangerous. Where did you turn up this little gem of a doozy? Nana Plaza? Let's get the facts straight. UK pensions are UK sourced income and are, except for some former government employees, subject to income tax under the PAYE system and will be deducted at source by the pension provider. No hiding from it.

Guesthouse - Same post, Point 2. Once again, you are quoting from that great pool of mis-information - hearsay. You heard (correctly) about a five year restriction but display total ignorance of its implications and when it is applied. Your bigotry blinds you to facts. You should refrain from posting mis-information that could severely damage people. You, more than any other poster in this thread need to find an adviser who does!

Guesthouse - "I doubt very much that the vast majority of expats in Thailand who are being targetted by QROPS salesmen have sufficient funds in their pensions by age 50 to attain a sustainable early retirement". Perhaps not amongst your circle of acquaintances.

Guesthouse - I resent being defined as a "carpet bagger" in the same way that you would resent being defined as a sex tourist purely on the basis that you live in Thailand (I assume).

Gambles - you must have the patience of a saint to moderate your language when faced with with the vitriol of some of these people. We both know just how much lack of knowledge and mis-information exists amongst UK expats in respect of successfuI planning, but you must be as surprised as I am at some people's willingness to display it in a public forum. I am quite sure that this is part of your marketing mix, but you cannot reason with ignorance and bigotry. This is my first and last post in this thread. Please, stop dignifying them and do the same.

I always thought CII was a minimum level qualification in order to call oneself any kind of IFA, congratulations, though, on your further studies toward an "even higher level" qualification. I hope you keep us in touch with your progress

Edited June 14, 2010 by wordchild

[angie]

Just received mine at age 45 from the UK

I used premier pension solutions asia dot com

Hope that nhelps some of you!

[121Advice]

It is pleasing to read that the majority of forum members are aware of the importance of seeking advice from a UK FSA authorised IFA where there are greater compliance and reporting requirements and, to a certain degree a greater level of investor protection via the Financial Ombudsman if things go wrong.

Although I am an IFA (yes and proud of it I might add) I have always been shocked at the standard of advice provided in Thailand by so-called 'advisers' and the amount of complete garbage spoken in and around the bars.

I have 20 years IFA experience (at MD level) and form part of the largest IFA group in the UK. I am regularly quoted in the FT, Investors Chronicle and Money Management and have won Life & Pensions "Large IFA of the Year 2010" so we must be doing something right? I am based in Chonburi for 9 months of the year and have several UK Expat clients here in Thailand as well as UK & Thai based companies and manage the money for some UK registered charities too.

There IS access to qualified, IFA registered and authorised advice for those based in Thailand and I would like to think that dealing with a large UK PLC provides a certain degree of peace of mind? It is unusual for such an operation to be available to Thai based UK Expats, but after a few of my UK clients retired to Thailand and I came to visit them for reviews (15 years ago) I gradually started to understand the gravity of the situation when I saw first hand what advice was being provided - and shocked! Under FSA passporting rules, suitably qualified and authorised IFA's can gain permissions to advise internationally, subject to local constraints of course.

I do not need any additional clients and do not wish to actively promote what I do as I am semi-retired, but my biggest frustration has always been the quality of advice available to the increasing number of retirees and expats who face a dilemma on how best to invest their money to maintain a comfortable retirement when faced with increasing longevity and an unregulated offshore financial services environment.

The best advice I can give ANYONE is to sort out their finances/investments BEFORE they move abroad and ENSURE that they deal with an IFA [uK} who can subsequently service/visit them abroad on an ONGOING basis. Most IFA's cannot do this - so that should make the shortlist of who you deal with, well, very short! Just like buying a car. Purchasing it is one thing, maintaining it is another - and you wouldn't entrust your pride and joy with an unqualified Thai mechanic who's a distant relation of your wife's third cousin would you?

[121Advice]

QROPS are highly miss sold internationally and CAUTION should be exercised. They have their place but HMRC (UK) are looking very closely at retrospective legislation as we speak due to several complaints about mis-selling. QROPS in highly regulated environments such as the UK, Singapore & Hong Kong are NOT so widely promoted as they are in Thailand. As a IFA of some 20 years experience advising UK Expats I would advise extreme caution.

Myself and my company provide advice in conjunction with full FSA authorisation, compliance and due diligence, we also form part of the largest firm of IFA's in the UK and holder of the Life & Pensions "Large IFA of the Year Award". Not to blow my own trumpet, but simply to highlight that I have commented in the FT, Money Management and Investors Chronicle back home on such subjects and one needs to recognise another mis-selling scandal when you see one!

Just because your 'best mate' has one and thinks you should too does not mean QROPS is right for you also. One of the other forum members has CORRECTLY stated that after residing abroad for in excess of 10 years it is actually quite straightforward to have your UK Pension paid to you Gross by completing a simple HMRC request. HOWEVER, having your pension paid Gross is one thing, being able to bequeath your pension 'pot' to your next of kin upon your demise is another. QROPS does facilitate this, but this facility alone does not make QROPS the answer to everything. Longevity, the size of your pension fund, health and internal benefits of the originating scheme need to be fully critiqued prior to any decision being made.

I know most of this is simple common sense - but sometimes investors leave their wits at the airport!! My website has a full QROPS guide you might wish to read, but in any event speak to a well established IFA with Passporting authorities to provide advice overseas (such as ours) either based in Thailand or back in the UK.

One final important point is that QROPS like any 'versatile' investment needs to be INVESTED and needs to be MANAGED once you have one. Who exactly are you going to get to manage your fund(s) appropriately? Most advisers have little investment expertise and simply opt for last years winners - (this years looser's). I won't bother going into fund switching and dealing charges of the QROPS or other such considerations but needless to say these are all areas that need to be addressed.

Edited November 22, 2010 by boyettcamp

[Chester]

I am an absolute believer in QROPs as they fulfill an important role in an expats financial planning. However, you need to seperate the QROPs trust from the investment vehicle. On the basis that the "QROPs trust" as a pension plan is valid and correct for you, a decision needs to be made about how to invest the assets that are going to used within the QROPs trust.

This is the part you need to be careful with. I would avoid any sort of PORTFOLIO BOND like a cancer. Firstly, you will be told that they offer the widest form of investment opportunities, which as a statement is in fact correct. Ask the advisor the basis for choosing any particluar fund or asset and see how confident you feel whether the recommendation is based on through research or a stab in the dark.

Then find out exactly how much commission is bieng taken from your fund. Most advisors will explain that you have 100% allocation of funds, which in itself is true. Then how come, an advisor can earn up to 13% commission and who pays for that commission.

The answer is simple, you the client pays for the commission out of your fund, except you just dont see it.

Any time you are told that there is a penalty for moving your QROPs fund to another fund manager, say within the first 5 to 6 years, you will be penalised. Why on earth should any client be forced to keep to one investment manager. I have heard of certain companies who even charge up to 4% for moving funds withing the portfolio bond.

Most offshore IFA's know the subject about QROPs, but it is important to estblish whether you the client have any protection against what the advisor is telling you. Follow these simple rules and guidlins and your QROPs will work for you.

1. Ask the advisor the3 basis for any recommendation

2. If you are being recommended to use a portfolio bond, these are 2 IMPORTANT quesitons you need to ask:

• What percentage of my pension fund buys units - 100% is standard
• If I chose to move my fund within 5 years, will I be penalised

If the answer to the above is 100% and YES - your fund will be 'raped'

Avoid a portfolio bond and your QROPs has a chance and try to take advice only from firms that can offer protection through PI cover.

Hope this helps.

QROPS are highly miss sold internationally and CAUTION should be exercised. They have their place but HMRC (UK) are looking very closely at retrospective legislation as we speak due to several complaints about mis-selling. QROPS in highly regulated environments such as the UK, Singapore & Hong Kong are NOT so widely promoted as they are in Thailand. As a IFA of some 20 years experience advising UK Expats I would advise extreme caution.

Myself and my company provide advice in conjunction with full FSA authorisation, compliance and due diligence, we also form part of the largest firm of IFA's in the UK and holder of the Life & Pensions "Large IFA of the Year Award". Not to blow my own trumpet, but simply to highlight that I have commented in the FT, Money Management and Investors Chronicle back home on such subjects and one needs to recognise another mis-selling scandal when you see one!

Just because your 'best mate' has one and thinks you should too does not mean QROPS is right for you also. One of the other forum members has CORRECTLY stated that after residing abroad for in excess of 10 years it is actually quite straightforward to have your UK Pension paid to you Gross by completing a simple HMRC request. HOWEVER, having your pension paid Gross is one thing, being able to bequeath your pension 'pot' to your next of kin upon your demise is another. QROPS does facilitate this, but this facility alone does not make QROPS the answer to everything. Longevity, the size of your pension fund, health and internal benefits of the originating scheme need to be fully critiqued prior to any decision being made.

I know most of this is simple common sense - but sometimes investors leave their wits at the airport!! My website has a full QROPS guide you might wish to read, but in any event speak to a well established IFA with Passporting authorities to provide advice overseas (such as ours) either based in Thailand or back in the UK.

One final important point is that QROPS like any 'versatile' investment needs to be INVESTED and needs to be MANAGED once you have one. Who exactly are you going to get to manage your fund(s) appropriately? Most advisers have little investment expertise and simply opt for last years winners - (this years looser's). I won't bother going into fund switching and dealing charges of the QROPS or other such considerations but needless to say these are all areas that need to be addressed.

[121Advice]

I fully concur, Portfolio Bonds are generally NOT the correct route to go as they are expensive and pay high commission's - maybe there's a link??

A straightforward portfolio of Unit Trusts in my humble opinion CANNOT be be bettered. Offshore Life Assurance bonds can provide some benefits vis-a-vis FX transfers at wholesale rates, but in the main they are to be avoided for sure.

Funny how many "advisers" promote the Portfolio Bond route over a traditional portfolio of funds - Hmmmmm... "£'s" spring to mind!

[121Advice]

THANK YOU and THANK YOU AGAIN Heebee!!

Isn't it funny how relatively unqualified advisers seem to think they can paint (or should that be 'taint') a picture which purposefully directs people to 'their' way of thinking - How convenient!

Barstool talk is just that and your comments are refreshing.

I too am ACII, HCITB and advanced AFPC, together with 'fellow' status of CII. In a world of misrepresentation I thank you for your concise replies to the comments raised earlier.

It is all about managing risk and expectations, NOT glorifying or touting a biased opinion!!

Well done Heebee.

Edited November 24, 2010 by boyettcamp

[DanielVanNiekerk]

Agreed ! Faramond Rocks, no doubt.

There's a lot of cowboys in this TEXAS of Financial Services that is Asia.

We have a UK FSA regulated office (I know, does not mean much here), I'm CII certified (Chartered Insurance Institute of the UK) and here legally.

PM me if you ever need a 2nd opinion, or just google "financial advisor thailand"...you'll find me there.

Regards,

Daniel

[DanielVanNiekerk]

I fully concur, Portfolio Bonds are generally NOT the correct route to go as they are expensive and pay high commission's - maybe there's a link??

A straightforward portfolio of Unit Trusts in my humble opinion CANNOT be be bettered. Offshore Life Assurance bonds can provide some benefits vis-a-vis FX transfers at wholesale rates, but in the main they are to be avoided for sure.

Funny how many "advisers" promote the Portfolio Bond route over a traditional portfolio of funds - Hmmmmm... "£'s" spring to mind!

A portfolio bond gives you access to funds you might NEVER have had access to. Some direct funds require say, U$1millon minimum investment...and through a portfolio bond you can perhaps get into the same fund for say U$100K only.

I don't know about you, but I'm definately into £'s, and LOTS of it as well, and so are my very happy HNW global clients as well. What's the use of having a "cheap" platform and not making any money? We have clients that actually MADE money in 2008...not many advisors around that can say that.

Daniel

"just Google 'Financial Advisor Thailand' to find me..."

[DanielVanNiekerk]

Three things to note:

1. You do not have to put your pension offshore in order to receive your pension tax free - UK tax laws allow anyone who has lived overseas for the ten years prior to drawing their pension to do so tax free (most the expats I work with who retire overseas make use of this clause to get their pensions tax free while still protected by the UK pension laws).

GH - can you provide a pointer/confirmation for this rule such as HMRC regulations etc, I can find no mention anywhere that such a rule exists and when I put the issue to a UK IFA a couple of days ago he replied that he has never heard of it before.

Yep, no such thing !

Daniel

"just Google 'Financial Advisor Thailand' to find me..."

[DanielVanNiekerk]

It is pleasing to read that the majority of forum members are aware of the importance of seeking advice from a UK FSA authorised IFA where there are greater compliance and reporting requirements and, to a certain degree a greater level of investor protection via the Financial Ombudsman if things go wrong.

Although I am an IFA (yes and proud of it I might add) I have always been shocked at the standard of advice provided in Thailand by so-called 'advisers' and the amount of complete garbage spoken in and around the bars.

I have 20 years IFA experience (at MD level) and form part of the largest IFA group in the UK. I am regularly quoted in the FT, Investors Chronicle and Money Management and have won Life & Pensions "Large IFA of the Year 2010" so we must be doing something right? I am based in Chonburi for 9 months of the year and have several UK Expat clients here in Thailand as well as UK & Thai based companies and manage the money for some UK registered charities too.

There IS access to qualified, IFA registered and authorised advice for those based in Thailand and I would like to think that dealing with a large UK PLC provides a certain degree of peace of mind? It is unusual for such an operation to be available to Thai based UK Expats, but after a few of my UK clients retired to Thailand and I came to visit them for reviews (15 years ago) I gradually started to understand the gravity of the situation when I saw first hand what advice was being provided - and shocked! Under FSA passporting rules, suitably qualified and authorised IFA's can gain permissions to advise internationally, subject to local constraints of course.

I do not need any additional clients and do not wish to actively promote what I do as I am semi-retired, but my biggest frustration has always been the quality of advice available to the increasing number of retirees and expats who face a dilemma on how best to invest their money to maintain a comfortable retirement when faced with increasing longevity and an unregulated offshore financial services environment.

The best advice I can give ANYONE is to sort out their finances/investments BEFORE they move abroad and ENSURE that they deal with an IFA [uK} who can subsequently service/visit them abroad on an ONGOING basis. Most IFA's cannot do this - so that should make the shortlist of who you deal with, well, very short! Just like buying a car. Purchasing it is one thing, maintaining it is another - and you wouldn't entrust your pride and joy with an unqualified Thai mechanic who's a distant relation of your wife's third cousin would you?

Faramond here in Thailand has a FSA regulated office in the UK, so we get 1st hand info all the time.

Its about active management, for sure...100% right !

Daniel

"just Google 'Financial Advisor Thailand', you'll find me..."

[121Advice]

Well, as they say.. "KISS" (Keep It Simple Stupid!)

And 2009 and 2010 was a good year for most of your investors too I hope!

I still see little real value in a portfolio bond over a traditional portfolio of funds (such as Unit Trusts) as 'like for like' the lower charges of unit trusts will always win. I do agree with your point about Portfolio Bonds facilitating access to a whole heap of funds not readily accessible to the 'average' investor - this is true. But in my experience most investors (including HNW ones) quite like keeping things simple and it's the adviser(s) who tend to get over excited about the weird & wonderful funds that are out there?

As we have seen repeatedly, the GOOD fund managers tend to have considerable longevity of tenure and a pedigree to match. There are only a handful of them around - most fund managers are overpaid prima donnas!

Portfolio Bonds can provided benefits relating to Inheritance Tax via trusts etc etc. But if you are talking about REAL High Net Worth clients - they can afford to invest in their OWN bespoke unit trust at a considerable saving over one 'off the shelf'..

A delicate balancing act for sure - but one would have to agree that Portfolio Bonds tend to be favoured more by the adviser than any knowledgeable investor - they tend NOT to choose this 'wrapper'.. I wonder why?

[wordchild]

Well, as they say.. "KISS" (Keep It Simple Stupid!)

And 2009 and 2010 was a good year for most of your investors too I hope!

I still see little real value in a portfolio bond over a traditional portfolio of funds (such as Unit Trusts) as 'like for like' the lower charges of unit trusts will always win. I do agree with your point about Portfolio Bonds facilitating access to a whole heap of funds not readily accessible to the 'average' investor - this is true. But in my experience most investors (including HNW ones) quite like keeping things simple and it's the adviser(s) who tend to get over excited about the weird & wonderful funds that are out there?

As we have seen repeatedly, the GOOD fund managers tend to have considerable longevity of tenure and a pedigree to match. There are only a handful of them around - most fund managers are overpaid prima donnas!

Portfolio Bonds can provided benefits relating to Inheritance Tax via trusts etc etc. But if you are talking about REAL High Net Worth clients - they can afford to invest in their OWN bespoke unit trust at a considerable saving over one 'off the shelf'..

A delicate balancing act for sure - but one would have to agree that Portfolio Bonds tend to be favoured more by the adviser than any knowledgeable investor - they tend NOT to choose this 'wrapper'.. I wonder why?

i assume your last question was rhetorical, the reason investors should avoid porfolio bonds would be; because they are poor value due to the enormous charges, a fair chunk of which lines the pockets of your "friendly" local ifa. Treat anyone who pushes these products at you with a great deal of caution!

Edited February 28, 2011 by wordchild

[121Advice]

I agree entirely wordchild and earlier on this subject I said very much the same thing concerning commission orientated advisers. There is much flawed advice available around offshore/onshore bonds and 99% of clients do not need the extra 'bolt-ons' provided by Portfolio Bonds. These are only there to 'sweeten' what is fundamentally a VERY expensive way to invest with in most cases unjustifiably high commissions. FACT!

Direct investment via the manager's unit trust, SICAV or UCITS instrument will always be cheaper - without an additional 'layer' of charges from a Life Office Portfolio Bond provider. If an investor can't access certain funds unless they use a 'middleman' you have to wonder why on earth they are selecting that type of fund when there are very good, consistent funds available to the masses? You really don't need to over cook any portfolio with 'elitist' funds - many are volatile and in my experience even the wealthiest of investors just want a steady, better than average portfolio and still be able to sleep at night!!

Ten years ago everyone was being flogged Investment Bonds in the UK, just like endowment policies - now not so. They are a dying breed and investors have woken up to better ways to invest - it is about time the offshore community did the same. This is a simple fact of 'best advice' and anyone with some time should simply do some research on the internet and READ the many excellent articles published about this very subject. They will see for themselves that what i have said is the majority opinion and it is irrelevant what my personal opinion is on different funds/risk etc - this is about the fundamental rights & wrongs of cost effective investment for UK and Expat investors.

[expatworld]

Qrops can have many benefits, lower taxes, protection against UK inheritance tax and creditors, freedom to invest the funds in whatever you want, larger tax free lump sum payment than the UK, to name but a few.....

[SantiSuk]

Wow - some good steers and some utter tosh on here.

I particularly liked the one from the guy who started off well, berating much of the early tosh, then said:

"Guesthouse - dear oh dear oh dear!! Your post 2010-03-28 09.49. Point 1. Complete and utter rubbish!!! Worse than that, this is dangerous. Where did you turn up this little gem of a doozy? Nana Plaza? Let's get the facts straight. UK pensions are UK sourced income and are, except for some former government employees, subject to income tax under the PAYE system and will be deducted at source by the pension provider. No hiding from it."

Yes - Guesthouse's stuff about tax-free pensions raised my eyebrows too, but your own latter statement is inaccurate or misleading. No hiding from UK taxation on a UK-sourced pension? Well - yes there is if you are non-resident UK and taxed in another country on your UK-sourced pension and there is a double tax agreement like the one between the UK and Thailand. You can apply to HMRC not to be taxed in the UK (except for Government Pensions). It does not even matter if the pension is initially paid into a UK bank account. This is an area of taxation that will be central to many retiring Brits looking at whether to 'leave the country for UK tax purposes' (going non-resident in the vernacular), so it is careless to have frightened potentially a lot of horses.

This is very relevant to my own circumstances and I confirmed the facts above with HMRC yesterday before looking at this thread as it happens. Even in a relatively high marginal tax-rate country like Thailand there can be circumstances where taxation of your pension in Thailand will result in lower tax than having it taxed in the UK (I think - still working on the numbers, but the withdrawal of personal allowances for higher income individuals seems to have secured a worse deal in the UK than in Thailand and for the well-rich the 50% marginal UK rate really nails it).

Of course if anyone knows different ....

I am convinced that the old addage that a client who relies on his own advice has a fool for an advisor is one of life's great urban myths, but boy you have to grind some hours to advise yourself. Advisers have their place if you get yourself up to speed first.

[wordchild]

Wow - some good steers and some utter tosh on here.

I particularly liked the one from the guy who started off well, berating much of the early tosh, then said:

"Guesthouse - dear oh dear oh dear!! Your post 2010-03-28 09.49. Point 1. Complete and utter rubbish!!! Worse than that, this is dangerous. Where did you turn up this little gem of a doozy? Nana Plaza? Let's get the facts straight. UK pensions are UK sourced income and are, except for some former government employees, subject to income tax under the PAYE system and will be deducted at source by the pension provider. No hiding from it."

Yes - Guesthouse's stuff about tax-free pensions raised my eyebrows too, but your own latter statement is inaccurate or misleading. No hiding from UK taxation on a UK-sourced pension? Well - yes there is if you are non-resident UK and taxed in another country on your UK-sourced pension and there is a double tax agreement like the one between the UK and Thailand. You can apply to HMRC not to be taxed in the UK (except for Government Pensions). It does not even matter if the pension is initially paid into a UK bank account. This is an area of taxation that will be central to many retiring Brits looking at whether to 'leave the country for UK tax purposes' (going non-resident in the vernacular), so it is careless to have frightened potentially a lot of horses.

This is very relevant to my own circumstances and I confirmed the facts above with HMRC yesterday before looking at this thread as it happens. Even in a relatively high marginal tax-rate country like Thailand there can be circumstances where taxation of your pension in Thailand will result in lower tax than having it taxed in the UK (I think - still working on the numbers, but the withdrawal of personal allowances for higher income individuals seems to have secured a worse deal in the UK than in Thailand and for the well-rich the 50% marginal UK rate really nails it).

Of course if anyone knows different ....

I am convinced that the old addage that a client who relies on his own advice has a fool for an advisor is one of life's great urban myths, but boy you have to grind some hours to advise yourself. Advisers have their place if you get yourself up to speed first.

I dont know if you mentioned Thailand when you spoke to HMRC. While it is true that some UK double taxation treaties make provision for the taxation of pensions in your new adopted country and therefore paid gross from the UK, the current treaty between the UK and Thailand specifically excludes pensions. However a new treaty is past due and things may change.

Edited August 13, 2011 by wordchild

[SantiSuk]

Wow - some good steers and some utter tosh on here.

I particularly liked the one from the guy who started off well, berating much of the early tosh, then said:

"Guesthouse - dear oh dear oh dear!! Your post 2010-03-28 09.49. Point 1. Complete and utter rubbish!!! Worse than that, this is dangerous. Where did you turn up this little gem of a doozy? Nana Plaza? Let's get the facts straight. UK pensions are UK sourced income and are, except for some former government employees, subject to income tax under the PAYE system and will be deducted at source by the pension provider. No hiding from it."

Yes - Guesthouse's stuff about tax-free pensions raised my eyebrows too, but your own latter statement is inaccurate or misleading. No hiding from UK taxation on a UK-sourced pension? Well - yes there is if you are non-resident UK and taxed in another country on your UK-sourced pension and there is a double tax agreement like the one between the UK and Thailand. You can apply to HMRC not to be taxed in the UK (except for Government Pensions). It does not even matter if the pension is initially paid into a UK bank account. This is an area of taxation that will be central to many retiring Brits looking at whether to 'leave the country for UK tax purposes' (going non-resident in the vernacular), so it is careless to have frightened potentially a lot of horses.

This is very relevant to my own circumstances and I confirmed the facts above with HMRC yesterday before looking at this thread as it happens. Even in a relatively high marginal tax-rate country like Thailand there can be circumstances where taxation of your pension in Thailand will result in lower tax than having it taxed in the UK (I think - still working on the numbers, but the withdrawal of personal allowances for higher income individuals seems to have secured a worse deal in the UK than in Thailand and for the well-rich the 50% marginal UK rate really nails it).

Of course if anyone knows different ....

I am convinced that the old addage that a client who relies on his own advice has a fool for an advisor is one of life's great urban myths, but boy you have to grind some hours to advise yourself. Advisers have their place if you get yourself up to speed first.

I dont know if you mentioned Thailand when you spoke to HMRC. While it is true that some UK double taxation treaties make provision for the taxation of pensions in your new adopted country and therefore paid gross from the UK, the current treaty between the UK and Thailand specifically excludes pensions. However a new treaty is past due and things may change.

Thanks. Yes I did say Thailand, but I'll go back and check it with them. I did not get the sense that she consulted the specific tax treaty so you may well be correct and I may have led her to believe that the presence of a double tax treaty meant that pensions were covered.

Use of the term 'specifically excludes pensions' is a bit strong though. I did not see any reference to pensions in the Thai/UK Double Tax Convention that I got from the Thai Revenue web-site. 'Makes no provision for pensions' would be more accurate?

This is the bit from HMRC's website that led me to believe you can be taxed (only) in Thailand.

DT1926 - Non-residents: UK income: Pensions: General

Pensions, other than Government pensions (see DT1927), paid in consideration of past employment to a resident of a country with which the United Kingdom has a double taxation agreement are normally taxable only in the country of which the pensioner is a resident but there are exceptions to this. For example, the agreement with Sweden gives limited taxing rights to the source country, the agreement with Zimbabwe .... (another circumstance that is not relevant to our debate)

It seems to me that this gives a more general right to a resident of Thailand to be taxed only in Thailand, whether mentioned in the double tax treaty or not.

This must be a regular issue with many Brits who have retired to Thailand. Anyone else know whether you can elect not to be taxed in the UK on your UK-sourced pension (includes the state pension) if you are a non-resident Brit - provided always of course that you are taxed on your pension in Thailand?

Edited August 15, 2011 by SantiSuk

[expatworld]

You should read up on QROPS what you have done is enquired about UK pension in the UK. This is totally different if you have transferred a UK pension into a Qrops, then it falls outside of the UK tax system....

[SantiSuk]

You should read up on QROPS what you have done is enquired about UK pension in the UK. This is totally different if you have transferred a UK pension into a Qrops, then it falls outside of the UK tax system....

That's because I am addressing pensions that I have that are already in payment. As I understand it (but others are showing that sometimes I don't understand at all) QROPS are for pension funds that have not reached payment/drawdown. I fully intend to read up on QROPS in respect of another pension pot I have that has not been drawn on yet.

I think this debate may have already been had above, so we may be in danger of going round in circles

[Patronus]

This is the bit from HMRC's website that led me to believe you can be taxed (only) in Thailand.

DT1926 - Non-residents: UK income: Pensions: General

Pensions, other than Government pensions (see DT1927), paid in consideration of past employment to a resident of a country with which the United Kingdom has a double taxation agreement are normally taxable only in the country of which the pensioner is a resident but there are exceptions to this. For example, the agreement with Sweden gives limited taxing rights to the source country, the agreement with Zimbabwe .... (another circumstance that is not relevant to our debate)

It seems to me that this gives a more general right to a resident of Thailand to be taxed only in Thailand, whether mentioned in the double tax treaty or not.

This must be a regular issue with many Brits who have retired to Thailand. Anyone else know whether you can elect not to be taxed in the UK on your UK-sourced pension (includes the state pension) if you are a non-resident Brit - provided always of course that you are taxed on your pension in Thailand?

Although I am over 10 years away from the State pension, I do have an occupational pension that is already 'in payment'.

I would also like to consider the option to be treated under the Thai tax regime. After 30 odd years of filling in UK tax returns I would like to get away from that annual task !

I am currently spending 10 months a year in Thailand and expect to be here permanently by the end of tax year ended 5 April 2013.