Private pension and moving abroad

davholla

I have 2 former work related private pensions( my new job does not have a pension scheme).

(The first pension was 3 years and the 2nd 2 years of paying in, I also have a very small final salary pension from another job).
I am 37. I might be moving abroad (Colombia) in the next 4-24months. What should I do with my pensions? Start another one there?
I guess that any contributions I make when living abroad will not have the tax benefits? Or could they if I still pay some tax here?

Cook_County

How does Colombia tax a UK pension plan? Does it tax the growth? Can you transfer the plans to a QROPS in Colombia?

davholla

Thanks a lot for that. I will find out.

davholla

Quick question are all pension plans in the UK movable to QROPS? I am making contributions to a pension plan in the UK and move abroad
can I still make contributions?

devildog

All I know is that if you are classed as 'not ordinarily resident' you can pay into a UK pension scheme for 5 years and get the tax relief.After 5 years your contributions would have to stop and the policy would become paid up, when you then returned to the uK you could once again start paying into the plan.
If you gave up residency then I am not sure how you would be affected.

davholla

devildog wrote: »

All I know is that if you are classed as 'not ordinarily resident' you can pay into a UK pension scheme for 5 years and get the tax relief.After 5 years your contributions would have to stop and the policy would become paid up, when you then returned to the uK you could once again start paying into the plan.
If you gave up residency then I am not sure how you would be affected.

Well you know more than I do so thanks. Hopefully someone will answer the rest.

Loughton_Monkey

I was in the same position myself. Went to the Far East for 6 years. As far as existing pensions in UK then I just left them where they were. There was absolutely no possibility of continuing to pay into them, because I was not resident in UK for tax purposes. You say you will be paying tax in UK? You can, I believe, only get pension tax relief from tax on "employemnt income", and not from, say, investment income etc. (Difficult to know why you would be paying tax here if you are moving to Coumbia).

While away, I paid local Income Tax on my earnings, but neither country I worked in allowed tax relief on pensios. However, I was able to bung away taxed income into offshore accounts (no tax on interest) and import those funds legally back to UK with no further tax liability - other than ongoing tax on Investment Income.

I recently read somewhere about QROPS - and about some current Government Proposal that will 'rape' huge sums of money out of these funds when back in UK. For the life of me I cannot find where I read it, but do be careful.

Small point, but DO use your full ISA allowance for any tax year in which you are resident in UK. For example, as I understand it, if you went abroad on 7th April 2011, you could still make your full contribution for the 2011/12 tax year.

devildog

'Not ordinarily resident' is basically not paying tax on employment earnings but (as we found out) you can still pay into a pension plan and get tax relief for 5 financial years after which time contributions have to stop until(if) you return.
I found that the Pension Advisory Service were very good at providing answers and supplying copies of the relevant legislation(doesn't cost anything and they are not trying to push anything either-they just give you the facts)