QROPS real advantage?

gravlax

nigelbb said:

If you are flexible on residence & more especially on tax residence you might consider other options. You presumably are paying into your SIPP out of UK earnings to take advantage of tax relief on the way in. You will however only get 25% tax free on the way out if you are tax resident in the UK (or in another juridstiction that has similar rules). If you were tax resident elsewhere it could be worthwhile to take the whole pension pot as a lump sum. France for example taxes a pension lump sum at just 7.5% when you liquidate the whole pot. 

 
Only getting the 25% tax free when UK resident is a good point, as is the fact that if tax resident elsewhere it could be possible that withdrawn amounts are even more favourably taxed.

What happens if you start making some withdrawals from a SIPP while not UK resident and pay tax locally on that income, then you later return to the UK and continue to withdraw income? Do you still get 25% tax free on withdrawals when you are UK resident again?

SomeMadeUpName

nigelbb said:

If you are flexible on residence & more especially on tax residence you might consider other options. You presumably are paying into your SIPP out of UK earnings to take advantage of tax relief on the way in. You will however only get 25% tax free on the way out if you are tax resident in the UK (or in another juridstiction that has similar rules). If you were tax resident elsewhere it could be worthwhile to take the whole pension pot as a lump sum. France for example taxes a pension lump sum at just 7.5% when you liquidate the whole pot. 

Can you take your 25% as a lump sum, then leave the UK soon after.

Asking for a friend (no really). 

bostonerimus

To find out how any cross border pension payment is taxed you’ll have to look at the applicable double tax treaty. Even if the country where the QROPS is located has very liberal tax laws you have to also account for the tax rules where you reside. FYI if you reside in France then UK SIPP withdrawals are only taxable in France.
it would be interesting to hear from any people who are withdrawing from QROPS to see how they worked out. What was the rate of return after fees over the years. Is it easy and inexpensive to make withdrawals and what is the tax situation?

bostonerimus

gravlax said:

nigelbb said:

If you are flexible on residence & more especially on tax residence you might consider other options. You presumably are paying into your SIPP out of UK earnings to take advantage of tax relief on the way in. You will however only get 25% tax free on the way out if you are tax resident in the UK (or in another juridstiction that has similar rules). If you were tax resident elsewhere it could be worthwhile to take the whole pension pot as a lump sum. France for example taxes a pension lump sum at just 7.5% when you liquidate the whole pot. 

 
Only getting the 25% tax free when UK resident is a good point, as is the fact that if tax resident elsewhere it could be possible that withdrawn amounts are even more favourably taxed.

What happens if you start making some withdrawals from a SIPP while not UK resident and pay tax locally on that income, then you later return to the UK and continue to withdraw income? Do you still get 25% tax free on withdrawals when you are UK resident again?

If you became a UK tax resident then you'd go back to paying UK income tax on 75% of your withdrawals...that assumes you didn't take the 25% tax free lump sum up front.

nigelbb

SomeMadeUpName said:

nigelbb said:

If you are flexible on residence & more especially on tax residence you might consider other options. You presumably are paying into your SIPP out of UK earnings to take advantage of tax relief on the way in. You will however only get 25% tax free on the way out if you are tax resident in the UK (or in another juridstiction that has similar rules). If you were tax resident elsewhere it could be worthwhile to take the whole pension pot as a lump sum. France for example taxes a pension lump sum at just 7.5% when you liquidate the whole pot. 

Can you take your 25% as a lump sum, then leave the UK soon after.

Asking for a friend (no really). 

Yes. UK tax rules apply while UK tax resident.