Pension position for overseas tax resident

Johnny1964

I am a UK citizen, resident and tax-resident in Japan. I hold a pension with Vanguard UK from which the 25% tax free amount has already been withdrawn. What would be the tax position if I were to withdraw some or all of this pension fund, eg is it liable to income tax and/or capital gains tax, and in which country? NB: I have been waiting nearly 4 months to receive a response from HMRC on this despite numerous complaints.

WainhouseTower

Interesting topic(s) similar from Spain.
25% Drawdown guess would be taxed at the appropriate rate in the country of residence in my case Spain and the extra income could put myself into a higher tax bracket (%).
Johnny 1964 as a side issue:
I have 2 funds performance comparison over 4 years.
Fund A.  ZERO INCREASE ( possible Ombudsman!)
Fund B.  Well over 50% increase.
What % increase over 4 years on your Fund?
For comparison!
Much appreciated 

QrizB

WainhouseTower said:

I have 2 funds performance comparison over 4 years.
Fund A.  ZERO INCREASE ( possible Ombudsman!)
Fund B.  Well over 50% increase.

Name of Fund A?

Name of Fund B?

Who chose them and with what end in mind?

dunstonh

I have 2 funds performance comparison over 4 years.
Fund A.  ZERO INCREASE ( possible Ombudsman!)
Fund B.  Well over 50% increase.
What % increase over 4 years on your Fund?
For comparison!

Secondly a zero increase on fund A is not necessarily wrong.    If you have a fund that is in with profits and guaranteed annuity rates or guaranteed minimum fund value then its common to see the annual bonus set to zero.  The final bonus will often get some return though.      Or it could be that you are in gilts/bonds and they have been flat over the last 7 years (up and then down again to where they were 7 years ago).   That is not grounds for complaint.

NorthYorkie

Johnny1964 said:

I am a UK citizen, resident and tax-resident in Japan. I hold a pension with Vanguard UK from which the 25% tax free amount has already been withdrawn. What would be the tax position if I were to withdraw some or all of this pension fund, eg is it liable to income tax and/or capital gains tax, and in which country? NB: I have been waiting nearly 4 months to receive a response from HMRC on this despite numerous complaints.

Your pension would normally be liable to income tax in both the UK and Japan but Article 17 of the UK-Japan Double Tax Treaty provides that this will only be taxable in Japan (see Synthesised text of the Multilateral Instrument and the 2006 UK-Japan Double Taxation Convention — in force - GOV.UK).

poseidon1

Johnny1964 said:

I am a UK citizen, resident and tax-resident in Japan. I hold a pension with Vanguard UK from which the 25% tax free amount has already been withdrawn. What would be the tax position if I were to withdraw some or all of this pension fund, eg is it liable to income tax and/or capital gains tax, and in which country? NB: I have been waiting nearly 4 months to receive a response from HMRC on this despite numerous complaints.

Firstly I would not expect HMRC to comment on the tax regime of a foreign country and how that country treat remittances of any kind.

The onus  is for you to make your own enquires, prior to leaving the UK and when you arrive.

HMRC are not an international personal tax advisor to the UK public. There are a significant number of accountancy firms both here and abroad whose business model is to provide such cross border tax advice for a fee.

Be that as it may, the reddit thread below may give you some clues as to the predicament you may have placed yourself in by not properly  planning your fiscal entry to Japan, whose tax system  seems to be somewhat opaque.

https://www.reddit.com/r/JapanFinance/comments/1h2d0fc/retiring_in_japan_from_uk_how_to_avoid_taxes_in/

As the OP in the reddit thread has observed, a fair degree of personal research is a must, as well as  obtaining professional advice if you hit a brick wall.

I suspect your long awaited response from HMRC will likely disappoint when you finally receive it.

Bostonerimus1

NorthYorkie said:

Johnny1964 said:

I am a UK citizen, resident and tax-resident in Japan. I hold a pension with Vanguard UK from which the 25% tax free amount has already been withdrawn. What would be the tax position if I were to withdraw some or all of this pension fund, eg is it liable to income tax and/or capital gains tax, and in which country? NB: I have been waiting nearly 4 months to receive a response from HMRC on this despite numerous complaints.

Your pension would normally be liable to income tax in both the UK and Japan but Article 17 of the UK-Japan Double Tax Treaty provides that this will only be taxable in Japan (see Synthesised text of the Multilateral Instrument and the 2006 UK-Japan Double Taxation Convention — in force - GOV.UK).

For regular UK DC pension, withdrawals will be taxable as income by Japan unless it is a UK Government pension when it will be taxable in the UK...see Article 18 paragraph 2. So make sure the Japanese authorities know about the 25% you've already withdrawn as it might well be taxable in Japan. This is pretty standard stuff for international double tax treaties. You can use HMRC form "DT-Individual" to claim tax treaty relief  from UK taxation.

NorthYorkie

Bostonerimus1 said:

For regular UK DC pension, withdrawals will be taxable as income by Japan unless it is a UK Government pension when it will be taxable in the UK...see Article 18 paragraph 2. So make sure the Japanese authorities know about the 25% you've already withdrawn as it might well be taxable in Japan. This is pretty standard stuff for international double tax treaties. You can use HMRC form "DT-Individual" to claim tax treaty relief  from UK taxation.

Agreed, but his pension would be from Vanguard UK, so still Article 17.