Choice of Overseas Pension May Cost You 55pc Tax Charge – TaxBack

from the blog.

How Your Choice of Overseas Pension Scheme May Cost You 55pc Tax Charge

Sydney -Harbour -Bridge -14

A lot of Britons save into their pension in preparation for a
retirement overseas. This is made possible through a qualifying
recognised overseas pension scheme (QROPS) that is available around
the world. Following HMRC’s publication of an updated list,
however, the number of QROPS available to savers has been
significantly reduced.

The Australian scheme, for example, used to be 1,600 but is now
reduced to 1. The Swiss schemes has gone from 100 to 1, while the
French scheme has fallen from 34 to 4. What used to be around 3,800
schemes available for British savers has now been reduced to just
around 600, which is drastic change by anyone’s standards.

These changes not only limited QROPS options for Britons, but
also come at a cost. Because any saver who would transfer their
pension to a scheme that is not included in HMRC’s updated list
would have to pay 55pc tax charge on the money in their pension
pot. This also means pensioners no longer have full control over
where they wish to retire overseas, unless they risk paying the tax

And, as much as people would like to think that they can get
away with it, HMRC has already informed overseas schemes that they
must comply with the newly enforced pension freedom rules, which
states that members are prohibited from accessing their savings
until they reach the age of 55. The only exception is when early
retirement is because of health problems.

Anyone who transferred their pension before 6 April may be
exempt from the 55pc tax charge, according to James McLeod of
financial advice firm AES International. The Australian Treasury is
said to be negotiating relief for transfers as well, allowing
exemption for those who transferred after 6 April, but not after 17

To make sure you don’t lose money you’re owed,
apply here

Related Posts

Getting your owed money from Tax Refund Services in UK

Do you really prefer to spend your time filling out and editing tax forms, hoping that you will receive a tax refund, after all that work? Even after ensuring that all your paperwork is done correctly, how likely are you...

Self-Employed Individuals Encouraged to Reach New Deadlines for Tax Returns

The COVID-19 crisis is having far-reaching financial effects on individuals and companies alike in the UK and around the world. The Low Income Tax Reform Group (LITRG) says that self-employed individuals who have yet to submit their 2018/19 self-assessment tax...

Tips for Filing Your 2020 Self-Assessment Tax Return

If you were self-employed from 6th April 2018 to 5th April 2019 and have earned more than £ 1000, then you need to file a self-assessment tax return and pay any tax that you owe before 31 January. Self-Assessment is...

Leave a Reply

Translate »