UK pension liberation a blessing or a tax trap

Fiduciary Wealth Team

The largest single issue for non-UK resident British expatriates looking to cash out a UK pension is “tax.” Pension liberation after age 55 might seem very alluring but there are some horrendous tax traps to consider.

Are you aware that the tax treatment for non-residents is not just dependent on double taxation treaties between UK and your country of residence? Did your financial adviser not tell you that HMRC may levy an additional tax on non-residents looking to cash out? Do you really think HMRC will allow non-residents to cash-out a UK tax relieved pension fund without a UK tax charge?

And those who pretend to still be UK resident despite triggering tax residence elsewhere fare no better. UK tax payers will be taxed at their marginal rate on any income taken.

Pension liberation comes at a considerable cost for those enticed by it. Your average QROPS member with a fund of £300K could end up paying tax at a rate of 45%

The UK pension landscape is changing and this may have an impact on your pension arrangements. If you are looking to transfer your UK pension into a QROPS you need to speak to a cross border financial planning firm like ours which can expertly guide you through the retirement planning process. For professional pensions and investments advice on QROPS please call us on Tel: +34900102374 or email to arrange a private consultation at our expense with one of our financial consultants.