Thinking of leaving UK. ISA, AVIVA, state pension, taxes

Hi there, I hope you all are doing well. After spending 7-8 years in the UK, im thinking of leaving the country. There are many financial questions I have to think about.
  • I have an ISA with Vanguard. gov.co.uk website says I will not be able to pay into this ISA once I leave the UK and that I dont have to close the account. It can just stay there and grow in value. ISA offers tax free investment up to 20k. I was wondering if, when I decide to sell my Vanguard investments and  cash out, will I be taxed in the UK? 
  • I have some money in my AVIVA pension that employers paid in. When the time comes (im still just 31), will I be able to claim AVIVA pension if im not a resident in the UK?
  • and finally, a will.  In case something happens to me, I would like to have a will which would have directions on what to do with my investments in the UK. If I am not a resident in the UK, will the will still be doing what it was supposed to do? For example give the money to my family which is outside the UK.
I know these questions are very different, but I hope someone will be able to help.
Thank you.

Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546
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    Be no tax in the UK on your ISA. Though dependent where you are tax resident then you may find yourself liable, i.e. if global rules apply. 

    Yes you will. Again tax may apply locally. 

    Might be easy to liquidate your investments and transfer the money back home. Rather than leave your executors with the administrative burden of doing so. 


  • masonic
    masonic Posts: 22,852
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    edited 16 May 2021 at 9:38AM
    You do not mention whether you intend to return in the future, but presuming you don't intend to do so, then there would seem little point in retaining the ISA. Likewise, it often makes sense to transfer and consolidate old pensions.
  • MacPingu1986
    MacPingu1986 Posts: 118
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    Justin - I spent some time overseas so can explain a bit on the ISA for you - Once you've left the UK and assuming this makes you non-UK Tax resident - you can't pay any further contributions into the ISA  - but you can keep it and let it grow in value (both dividends / capital growth / interest etc...) - you won't be taxed in the UK but you may be taxed on the proceeds in your new tax resident jurisdiction (I was and had to declare it on my tax return) - taking some local tax advise or doing some thorough research will be important.

    You should be able to claim your AVIVA pension on retirement no problem - although again if you living overseas local tax rules may apply.

    Finally re the will I'd suggest taking legal advice on this - based on where you are resident/tax-resident all sorts of rules could apply. 
  • dunstonh
    dunstonh Posts: 115,663
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    You should be able to claim your AVIVA pension on retirement no problem - although again if you living overseas local tax rules may apply.

    That is normally the case but there can be issues if the person moves to a member of the EU as the EU has currently locked the UK out of the market.  Although some companies have got permissions at country level for some types of business.



    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • MacPingu1986
    MacPingu1986 Posts: 118
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    Is that correct Dunston? (I'm not an IFA so I will defer to your knowledge!) - I wouldn't have thought there would be any issues with a UK pension being paid out to a foreign resident, or that local permissions were needed? 
  • dunstonh
    dunstonh Posts: 115,663
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    Is that correct Dunston? (I'm not an IFA so I will defer to your knowledge!) - I wouldn't have thought there would be any issues with a UK pension being paid out to a foreign resident, or that local permissions were needed? 
    Yes. Sadly it can be an issue.   Some banks have closed the accounts of people living in certain EU countries as well.
    A lot of pension providers no longer offer an in-house annuity and do not support income drawdown (the method that went mainstream in 2015 that was niche prior that).  So, that means buying a new pension product (either annuity or SIPP/PPP that supports drawdown).   That is a new purchase and a resident in the EU will find that most UK firms no longer have the ability to retail to EU residents.
    Its not an issue outside of the EU unless you are in a high-risk state for sanctions or the USA (which is more down to liability issues than regulatory).

    The OP is only aged 31.  Hopefully, the EU will see common sense and no longer be looking to punish the UK by the time he needs to start drawing on it.  
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • MacPingu1986
    MacPingu1986 Posts: 118
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    Cheers for the explanation :)
  • dunstonh
    dunstonh Posts: 115,663
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    Well, if it's that difficult to find anybody offering annuity purchases / drawdown of UK pensions for EU residents, then presumably more firms will see that as a gap in the market, and apply for the necessary permissions.

    Passporting permissions were removed.  The EU is not granting the UK passporting permissions.   So, it's not a case of being able to apply for them from the UK.     The alternative option is to set up an office within the EU (not a brass plate) and apply for permissions in an EU country.   This can either be EU wide or it can be a specific country within the EU.    

    The problem is that you need to have sufficient business to be able to cover the costs of doing that. 

    Those services may well cost more, and have less choice, than when the UK was in the EU. That's what happens when you leave a single market.

    Although the positive is that there is already talk about tearing up some of the rubbish elements of the EU regulations that drive up costs for all.  So, the home market may well benefit from lower costs and more choice.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • dunstonh
    dunstonh Posts: 115,663
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    My apologies for trying to discuss implications of brexit rationally. It won't happen again.
    Your post must have been deleted.  I can't see your rational discussion.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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