getting UK private pension when retiring in Italy

max888

Albermarle said:

I think I read in another thread that it is a good idea to take the tax free cash whilst still resident in UK , as your new country may not recognise it as tax free. You would need to check that with someone more expert though.

I agree, taxation in Italy is generally higher and they do not recognise UK pension funds.
I believe you might also have to pay a tax in Italy on capitals you hold in other countries (IVAFE), the tax is for owning the capital itself, additional to taxes on dividends, interests and capital gains

Albermarle

There is another similar thread .
Tax on SIPP overseas — MoneySavingExpert Forum

dean350

On your bank account, a multi currency account like Wise or Revolut can be useful. Set it up now and keep a UK address going and your provider can pay into the UK sort code and account number. Both accounts will then have a Euro sort code and account number and you can transfer between the two quite easily. Best to do lots of research on the tax. I know that Italy has a very low tax free allowance and so everything gets taxed starting at 20% or so.

NSG666

max888 said:

Hi,

I am considering retiring to Italy in long term.
By that time, I'd expect the only sources of income would be a pension from a SIPP, interests on savings and UK state pension (so no other work income).
I'd rule out transferring to an Italian pension fund since there are not QROPS funds in Italy and the transfer would be highly taxed by Italian government.
However I am not sure I could find a reputable UK pension provider who could pay a pension to a resident in Italy.
In fact I read that most providers won't pay to foreign bank accounts (or maybe even to non UK resident). If they still accept a UK bank account, there would be the hassle of finding and managing a bank for non UK residents.
Are there reputable companies providing pension funds for residents abroad (in EU)?
Anyone has experience with this situation? any recommendation?

Thanks

As a result of your post I've been in contact with my SIPP provider Hargreaves Lansdown as we are looking to move to Portugal. I don't know whether it helps you but here is what they said:

In this message I've included information about moving overseas, first regarding yours and your wife's HL SIPPs, then to your ISAs and some information that applies to SIPPs and ISAs.

If you move overseas to an EEA country, your HL SIPP can remain with us, you can continue to trade within the account and you can usually continue contributing to the SIPP for at least five years.

The countries currently forming part of the EEA include Austria, Belgium, Bulgaria, The Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain (including the Canary Islands) and Sweden. Although not technically part of the EEA, the following information also holds true for those residing in the Channel Islands, the Isle of Man, Switzerland and Gibraltar.

If you have no Relevant UK Earnings after moving to the EEA, you are still usually able to contribute up to £3,600 gross each tax year and receive tax relief for the first five full tax years after the year in which you were last resident in the UK for tax purposes.

If you do have Relevant UK Earnings you are usually still able to contribute up to your earnings, irrespective of how long you have lived abroad. The Annual Allowance rules will still apply.

If you choose to make a pension contribution, we will assume you are eligible to receive tax relief on the full amount unless you tell us otherwise before you make the contribution. It is your responsibility to ensure Hargreaves Lansdown is aware if you are not entitled to tax relief on your full contribution. If you are unsure you should seek financial advice or speak to your accountant before you contribute.

You still have the same retirement options if moving to the EEA, but please note that we can only pay income to a UK bank account. Taxable income from a pension is taxed at your marginal rate, so HMRC may provide us with an 'NT' ('No Tax') tax code if you're resident overseas, although you will likely still owe tax in your country of residence. Please speak to HMRC and your local tax authority for further information on how your pension income may be taxed.

Under HMRC regulations, if you currently have an ISA open in the UK and then move to Portugal, you cannot subscribe money into the ISA after the tax year that you move (unless you’re a Crown employee working overseas or their spouse or civil partner), assuming you will cease to be a UK resident at the end of the current tax year.

It will not be possible to add new money to an ISA in subsequent tax years unless you are resident in the UK for tax purposes.

However, you can keep your ISA open and you will still get UK tax relief on money and investments held in it but, please be aware, the country you move to may require you to pay tax on any earnings from and gains made by the ISA investments.

An ISA is specifically a UK tax efficient vehicle which other countries may not recognise. If you are a foreign tax resident, you will need to confirm with a local tax specialist if you will be required to pay foreign tax on your ISA investments.

You would be able to continue to give investment instructions on your holdings as an overseas resident and to manage your account but you would not be able to make new contributions once no longer resident in the UK for tax purposes.

You can resume making subscriptions to an ISA once you have returned and are a UK resident again (subject to the annual ISA allowance and any age qualification).

For both the SIPP and the ISA, if you move overseas, you’ll no longer be able to buy new units in UK Authorised funds. You can check whether a fund (OEIC/Unit Trust) is UK Authorised by viewing the Key Investor Information Document (KIID) which is available via the ‘Key Features and Documents’ tab of the relevant funds factsheet on our website. Please get in touch if you have trouble establishing whether a fund is a UK Authorised fund.

If you're residing and paying tax in the Republic of Ireland, you’re also unable to purchase new units in Irish based funds.

You won’t be required to sell any existing investments, including any existing units of UK Authorised funds, and can still purchase other investments in your account such as shares, investment trusts, ETF's, gilts and bonds.