Another LTA question

gemscot1

I have read the threads here and done some fact finding and have come up with the conclusion that I will need to apply for the LTA freeze - just wondered if my thoughts we valid?

1. My current pot is around £950k and is invested in a number of funds with a large pension company (its the scheme my employer set up)

2. I currently pay £40k max into pension

3. I am 46 years old and plan to withdraw funds as soon as possible - I am assuming 55

4. I plan to stop working in UK October 2016 and move to Spain as a resident (but may spend a few years in Portugal when I am 55 to draw my pension to get best tax treatment

5. If I pay my pension contributions until March 2016 then I can move the funds to a SIPP and then apply for the freeze

6. I would forgo my pension contributions for 6 months (April to Oct 2016) but this is likely to be small versus that my pot is likely to grow quite a bit in the next 9 years so I will likely exceed the 1.25 limit)

so it seems pretty logical to me but by reading the threads there are a lot of clever people out there - so happy for you to poke holes or suggest better options

thanks in advance

kidmugsy

Once you are a UK non-resident, is there any advantageous way to transfer the whole caboodle to a Spanish (or Portuguese) pension so that you can get at it before 55?

gemscot1

that was my plan but I have been a little scared from QROPS and been advised to keep the funds in the UK and use portugal to remove my full LTA as cash when i hit 55. QROPS seem a little bit of a minefield but interested if anyone has any positive or negative experience of them

I am also now thinking that given I cannot take any money out until 2023 then maybe the LTA will rise further with the indexation - I assume the frozen limits wont move?

DonM

Hi, to answer your questions and hopefully provide some insight...
1. Based on your current pot you are likely to exceed the LTA by the time you reach retirement age. The way to avoid this is by moving your pension into a QROPS since it will be assessed against the LTA (accounting for any protection you may hold) when the transfer occurs rather than when you start drawing down your pension

3. Withdrawal prior to 55 should not be considered since it may be classed as pension liberation which could result in high penalties.

A QROPS is a Qualified Recognised Overseas Pension Scheme and is therefore part governed by HMRC rules. If you consider them in the same light as any UK pension transfer you should be fine i.e. look at dealing with large reputable providers with long track records. Selecting the correct QROPS scheme may also provide you with a greater level of security.

Further material for research on the matter can be found at..
https://www.liberty-wealth.com/news/qualified-recognised-overseas-pension-scheme-qrops-defined-991.html