UK Tax Efficiency: Expats and Pension Planning

Making The Most of Your UK Pension Whilst Living Abroad

As the number of professionals around the globe moving and working abroad increases with time, it is increasingly important to understand how offshore financial products and services can help you achieve financial freedom as an expat. At times overlooked, ignoring the huge benefits of offshore planning could prevent you from living your dream retirement and securing family wealth for years to come.

Managing Your UK Pension

If you worked in the UK for several years, it will likely be the case that you have built up multiple pension pots across the different jobs you may have worked. If so, correct preparation and planning could be essential for you on your return to the UK. Consolidating all your historic pensions under one easy-to-manage roof, such as a SIPP, could provide you with the income and investment flexibility needed to ensure your return to the UK is as financially efficient as possible.

Power of the SIPP (Self-Invested Personal Pension)

Consolidating your historic pensions under a SIPP has many benefits.  A SIPP allows you to invest your hard-earned capital in a wide range of assets that fit your own risk criteria and can be altered easily if you have a change of circumstances in your life. Similarly, a SIPP provides you with income flexibility, allowing you to meet your financial commitments whilst also giving you the ability to take ad hoc lump sums. One further advantage is the flexibility a SIPP gives you for your retirement age. Unlike most UK Company Pension Schemes which have a fixed retirement age of 60-65, a SIPP can be accessed as early as 55 years old(rising to 57 in 2028). Lastly, the UK has over 130 DTA’s (Double Tax Agreements) that expats can potentially take advantage of subject to the tax rules in their new country of residence (see below). Using a SIPP allows you, the member, to make practical and effective use of these key benefits.

Making the Most of Double Tax Agreements

What is a DTA? (Double-Tax Agreement). A DTA is an agreement in place to prevent double taxation on the same income by two separate countries. Utilising a DTA has several benefits, including accessing your UK Pension potentially without paying UK tax if you are living and working overseas. Effective planning for your retirement can make the difference between just being able to live and living comfortably.

How Do I Use A DTA?

When living overseas, claiming taxation treaty relief is often seen as a complex and almost inaccessible process for expatriates to complete. At Elite, we aid and demystify this process for you. Our Advisers can walk you through the process of requesting relief from HMRC. After providing the required forms and information, the UK Pension member can obtain the required tax code to escape paying unnecessary tax and enjoy regular income for their hard-earned retirement. Don’t miss out on financial security.

Book a consultation with us and find out moreabout Pension Transfers and DTA’s here.