International retirement savings fund - tax implications of withdrawing lump sum - help needed!

AmyinIraq

While working abroad several years ago my employer set up a retirement savings fund with Zurich International for me. 
I am now back in the UK and have been asked what I want to do with this fund and I could really do with the lump sum however I don't understand the tax implications of withdrawing the funds. For reference, I am in my 40s but this fund allows withdrawal of some or all of the funds once you are no longer working for the employer who set up the fund.  Zurich International Solutions is based in Isle of Man (not sure if that makes any difference). 
Can I take a 25% tax free lump sum like pension funds allow when someone reaches 55?
Or is it like international investments where I would need to pay capital gains tax on any growth in the fund at the point I bring it into the UK?
Or something else entirely?

El_Torro

A quick internet search implies that you don't pay any capital gains tax on any gains. However if you withdraw money from the fund you will be liable for tax in the UK, assuming you are a UK resident when you withdraw. I assume the money withdrawn will be considered liable for Income Tax though I'm not clear on that point.

Whether the money can only be withdrawn at 55 or older and whether you get a tax free lump sum is unclear to me. 

Even if someone in this forum responds with informed answers I would suggest you seek advice from an accountant who is knowledgeable in this field. Have you at least asked Zurich International about this? They are unlikely to give you personalised tax advice without you paying for it, worth a try though.

Bostonerimus1

The rules as to when you can distribute will be set by the pension fund and where it is set up; the 25% tax free lump sum only applies to UK based funds. Assuming that you are UK resident you should look at the IOM/UK tax treaty and the new FIG regime for more information, but you will almost certainly have to pay UK income tax on any distributions if this is a pension/retirement fund.

DRS1

Were you working in the Isle of Man?  They used to have a pension regime which was closely modelled on the UK regime (so I imagine they would allow a tax free lump sum).  But being able to access it in your 40s doesn't sound like that sort of regime.

Maybe you should ask your old employer if they have any details on the tax treatment of this fund and payments out of it.  They should have given it some thought when they set the thing up.  Did they give you some sort of member's booklet?

Johnnyboy11

You should also research whether or not accessing the overseas pension will trigger the U.K. MPAA, which would restrict the amount of tax relief available for U.K. DC Pension contributions, currently set at £10k p.a. gross. My understanding is that it will, if you received tax relief on your contributions, but best get professional advice.