Accessing pension pot as a non-resident

gallygirl

I'm hopefully going to become a non-resident in next few months. In Aug 16 I'll be 55 and need to decide what to do with SIPP. I could leave it as I won't need immediately but I'm a tad paranoid about possible future changes reversing the freedom which is coming, e.g. if come next April there are lots of tales of people blowing the pots, ending up with massive tax bills as they didn't understand, getting scammed etc.

On the assumption I find somewhere suitable to invest overseas (I know I can't pay into an ISA), so can find a suitable home for the money, is what I'm proposing doable please (with simplification of likely tax allowance to make maths easy ):
16/17
Interest received from savings £250
Withdraw £13,000 from SIPP. 25% tax free = £3,250. 75% taxable = £9,750
Taxable income = £10,000. Tax allowance £10,000. Tax payable 0.
Repeat each year until pot empty.

I will also have rental income but assume the govt's proposal to end tax relief for overseas landlords will be implemented so the above will not impact on this.

Am pretty sure the above is ok but as I initially read the plans as being 25% of remaining pot, not withdrawal, tax free I thought best to check.

Also, as a non-resident, I intend to open a separate pension and pay in the maximum allowable of £2,880 a year. I'll be setting that up in the 15/16 tax year (if not later this one) so will have already established and funded it - I'm assuming they wouldn't consider it as recycling?

Thanks.

Your_Hero

Where will you be resident? You may not have a personal allowance as a non-UK resident (https://www.gov.uk/government/consultations/restricting-non-residents-entitlement-to-the-uk-personal-allowance/restricting-non-residents-entitlement-to-the-uk-personal-allowance)

Also, the 25% is tax-free in the UK, but may be taxable as income in other jurisdictions. Likewise, the 75% taxable part will be taxed in your jurisdiction.

Also, as a non-resident, I intend to open a separate pension and pay in the maximum allowable of £2,880 a year. I'll be setting that up in the 15/16 tax year (if not later this one) so will have already established and funded it - I'm assuming they wouldn't consider it as recycling?

You can't do this as a non-resident....

gallygirl

Your_Hero wrote: »

Where will you be resident? You may not have a personal allowance as a non-UK resident (https://www.gov.uk/government/consultations/restricting-non-residents-entitlement-to-the-uk-personal-allowance/restricting-non-residents-entitlement-to-the-uk-personal-allowance)

Also, the 25% is tax-free in the UK, but may be taxable as income in other jurisdictions. Likewise, the 75% taxable part will be taxed in your jurisdiction.

You can't do this as a non-resident....

It will be a country covered by the list. At present anyway. What I'll need to keep an eye on if they change it is whether I can still take 25% of the lump sum tax free as a one-off.

I can pay £2,880 into a pension for 5 years on becoming non-resident - doesn't seem to be any proposed change to this.
http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm13103020.htm
But just concerned I'll be accused of recycling.

Your_Hero

gallygirl wrote: »

It will be a country covered by the list. At present anyway. What I'll need to keep an eye on if they change it is whether I can still take 25% of the lump sum tax free as a one-off.

I can pay £2,880 into a pension for 5 years on becoming non-resident - doesn't seem to be any proposed change to this.
http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm13103020.htm
But just concerned I'll be accused of recycling.

Quite right there, my bad.

And what about taxation in your country of residence?

gallygirl

Your_Hero wrote: »

Quite right there, my bad.

And what about taxation in your country of residence?

Well, depending on where we end up it varies. One option is no tax :j (but that place isn't one where I can keep my UK tax allowance so would probably take out the 25% lump sum then leave the rest). Of course, no point having no tax if I have no income so I'd have to get a job to take advantage of it . Need to explore the European option more fully but wanting to start with the UK position and work out IFSWIM .