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oldwelshman

QROPS and moving pensions

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oldwelshman    29

Ok.

Not had time to trawl through thousands of posts and only just joined.

I am retiring to LOS in 4 years latest, maybe earlier.(with my Thai partner/wife).

I have done some research into QROPS and it appears I can transfer my pensions, some or all, to another country if I chose to live abroad.

You can then pay tax in the other country or UK.

These schemes approved by UK Govt in listed countries and Thailand is not one of them.

However, apparently Hong Kong is on the list and it is tax free. In addition to this apparently HK has a double tax agreement with Thailand being 0% in HK so meaning I can get all my pensions tax free but can only move the pensions within 6 months of moving.

Do any of you guys on here do this or know more about this?

 

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Oxx    1,214

Too late.  You'll now be clobbered with 25% tax on your pension pot if you're not resident in the country of the QROPS.

 

You are now doomed to paying UK income tax for ever on your pension income.

 

Do, however, take your 25% cash lump sum and put it offshore out of the greedy grasp of Hector.

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HHTel    250

Correct.  I've moved most of my pensions to Gibraltar QROPS.  I was hoping to move the rest this year.  The budget stopped that.  Now if you move your pension to a QROPS  scheme and you don't reside in that country, then you're hit with 25% of the whole pot in tax plus paying UK tax for the next 5 years.  Pity we were not told this a year in advance.

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12DrinkMore    2,630

Typical UK government.

 

Saving and investing for retirement is one of the most important lifelong commitments (or should be). The regulations surrounding this should be well thought out, easy to understand and changed at a glacial speed. That is really the only way to encourage people to save. They should all know where they stand at any particular point in life, and be confident that in ten years and twenty years the parameters are not going to be radically changed in some vote getting mess.

 

The UK government exhibits as usual its rank incompetence to to the job it is supposed to do. New schemes are introduced every couple of years, the tax regulations surrounding retirement savings are radically altered regularly and to find out how much the "pot" is worth at any particular time requires a financial consultant.

 

The adversarial political system in the UK is no longer fit for purpose. Indeed none of the politicians in the UK are fit for purpose. The Brexit theater clearly shows the level of incompetence and lack of professional behaviour in comparison to the European negotiators. 

 

Sorry for the minor rant this morning.

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Oxx    1,214
1 hour ago, 12DrinkMore said:

Typical UK government.

 

Saving and investing for retirement is one of the most important lifelong commitments (or should be). The regulations surrounding this should be well thought out, easy to understand and changed at a glacial speed.

 

The introduction of QROPS was not something the (then Labour) government wanted to do.  It's the European Union that forced them to introduce QROPS under "Human Rights" legislation.  Since coming to power the Tories have been looking at ways to make them less and less attractive, whilst staying within the letter of the EU requirements.  Following Brexit we can look forward to further restrictions on QROPS, or complete elimination of them.

 

It's also worthwhile pointing out out that QROPS are inherently unfair.  Pension contributions attract a substantial tax allowance, which is normally clawed back during retirement as income tax.  For a non-resident with a QROPS the tax man can't claw back.

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saminoz    1,037

Luckily I moved my pension three years back to Gibraltar (2%).  You could choose to receive it quarterly or annually.

So fat it has been almost seamless.

I found a very good and straightforward adviser in Bangkok.

PM me if you'd like to contact him.

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Jip99    4,383
23 minutes ago, Shackleton123 said:

As mentioned QROPS is dead in the water. Killed off by the Tory Chancellor who saw it as a way the common or garden working man could actually use someone to help him avoid paying hefty taxes on his retirement fund. "Why should the peasants be allowed to access a route to tax avoidance that we upper crust use to embellish our fortunes" one could almost hear him say. However, it made not a jot of difference to the way the same peasants voted, they continued to vote Tory. Quite why the entire British Working People vote Tory is mystifying the most brilliant minds in politics. Turkeys voting for Christmas.

 

Pointless anti-Tory rant........................... hopefully you feel less insecure now.

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peterpop    73

I decided not to take QROPS when offered.  In UK I am completely in charge of my SIPP.  That is I buy and sell the shares that constitute my pension.  I do this in a tax shelter [the SIPP] and I only pay tax on that which I draw down and that is after 25% tax free on the sum I am using to draw from.

If you move to QROPS you can finish up in a very badly run pension scheme with on going charges that make a nonsense of  the move to save tax.

My advice is that if you have less than 200,000 uk pds in your pension pot in UK keep it there and be happy.  You have protections in UK that are hard to find elsewhere.

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Oxx    1,214
41 minutes ago, peterpop said:

I decided not to take QROPS when offered.  In UK I am completely in charge of my SIPP.  That is I buy and sell the shares that constitute my pension.  I do this in a tax shelter [the SIPP] and I only pay tax on that which I draw down and that is after 25% tax free on the sum I am using to draw from.

 

I have a QROPS.  I am completely in charge of it.  I can buy and sell the investments whenever I see fit.  I pay zero tax in any country in the world when I draw down.  And I was able to take a 30% tax free sum.

 

In comparison, a SIPPS sucks.  You missed an opportunity.

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HHTel    250

I'd forgotten that QROPS came under EU law.  With Brexit, it no longer applies.

 

Also, I agree with Oxx.  I'm in complete charge of my investments.  I can sell/buy on my decision and 'draw down' when I need to.

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oldwelshman    29

Bear with me please :-) So I can take my 25% tax free form all pensions, that will see me ok for few years. Next looks as if I would have to pay exit tax of 25% if living in Thailand.

If I lived in UK, first £10k tax free then 20% after so would I be able to leave pensions in UK and pay 20% then just transfer via bank accounts?

 

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Oxx    1,214

As a non-resident you still get the regular UK income tax allowances.

 

Your best strategy might be:

 

(1) Take the 25% lump sum and invest it offshore to provide a tax-free income.  This will reduce your UK income requirement, and so your UK income tax.

 

(2) Take a UK pension from the remaining 75%, paying zero tax on the first GBP 11,500 and 20% on income above that (assuming no other relevant UK income) (with marginal rates of 40% and 45% for high levels of income).

 

(3) It may be worth your while taking some of the offshore capital each year to reduce your UK income requirement, and hence reduce UK income tax.  This very much depends upon your personal circumstances.

 

The 25% exit tax only applies if you move your pension to a QROPS.  This is only going to look remotely attractive to individuals with massive pension pots who otherwise would pay a lot of UK income tax on their pensions.

 

 

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oldwelshman    29
5 minutes ago, Oxx said:

As a non-resident you still get the regular UK income tax allowances.

 

Your best strategy might be:

 

(1) Take the 25% lump sum and invest it offshore to provide a tax-free income.  This will reduce your UK income requirement, and so your UK income tax.

 

(2) Take a UK pension from the remaining 75%, paying zero tax on the first GBP 11,500 and 20% on income above that (assuming no other relevant UK income) (with marginal rates of 40% and 45% for high levels of income).

 

(3) It may be worth your while taking some of the offshore capital each year to reduce your UK income requirement, and hence reduce UK income tax.  This very much depends upon your personal circumstances.

 

The 25% exit tax only applies if you move your pension to a QROPS.  This is only going to look remotely attractive to individuals with massive pension pots who otherwise would pay a lot of UK income tax on their pensions.

 

 

Yes, thanks for reply. This is how it is looking for me with the change, bloody government. I was hoping to retire earlier had the qrops been left alone as it would have been tax free.

So as you suggest I think I will retire between now and 4 years (age 56 to 60) and take capital 25% with me, maybe some invested and draw on that for few years, then take the max tax free annualy. pretty sure I can live on £18k a year in LOS :-) Then at 67 my state pension also kicks in.

I think 20% on smaller amounts in UK better than a 25% exit tax and probably safer to leave pensions invested in UK as they will continue to grow.

Just need to work out how to get the money from sale of house in UK to Thailand lol proceeds for building house in LOS and rest for living off for couple years also. Too bloody complex and planning required :-)

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