non UK resident with UK pension plan

moneyguy2016

jamesd wrote: »

Well, it's a bit of a potential loophole but if you read the other topic here about Portugal that I linked to you'll find that it's specifically covered in UK legislation so that those who have left the UK can do it, with that return to the UK within a few years and you have to pay the tax originally due bit the aspect that closes the ability to use it as a loophole rather than if genuinely not UK resident like you. For you it's just things working as the government intended when the legislation was introduced.

Yes, it works out rather well for those retiring to Portugal. Unfortunately, where I’m at (clue, for those REALLY wanting to know , it’s the first country to have a QROPS excluded from the scheme, cf ROSIIP), the avoidance of DT treaty for Pension Income is ST, i.e. subject to tax in the contracting country, which has to be paid in order to claim a refund.

So I’ve gone a full circle, considered the tax angle from my tax domicile and concluded that I have to pay UK tax when I do partial lump sum withdrawals under UFPLS rules. I’m advised that the R43 can be filed but I won’t get the personal allowance (my country is part of the Commonwealth but that automatic concession disappeared recently and there’s no personal allowance under DT rules). So I’m resigned to have 25% tax free, 75% taxed at emergency PAYE rate and use the R43 to claim that back.

The question then is that, without the personal allowance, is the 20% tax band on the first £43,000 (32,000+11,000), or the first £32,000 (43,000 - 11000)?. Makes a difference on my withdrawals to keep within the 20,000 band which would result in a net 15% tax.

I also looked at QROPS and transferring to say Gibraltar which has a lower pension income tax rate, but looking at the QROPS comments here and having to run the gauntlet of scams, administration, risks and costs I think I’m resigned to paying the 15% tax, taking the money and run.

Thanks all, I learnt a lot here, especially from @jamesd who made the effort to spell a few things out nicely for me.

jamesd

The basic rate band stays at £32k.

Sorry that didn't work out for you as well as it might have.