Tax-Free When Moving Your Pension to Gibraltar or Dubai? – TaxBack

from the blog.

Is It Really Tax-Free When Moving Your Pension to Gibraltar or Dubai?

Your Pension

If you are a non-UK resident or someone moving abroad, there are
several things you can do with your UK pension plan.

  • Leave your pensions in the UK pension plan
  • Transfer it to a Qualifying Recognised Overseas Pension Scheme
    (QROPS)
  • Pay into a UK Pension Scheme from wherever you are
    overseas

Among these options, the second one offers an opportunity where
you can cash in your pension with little to no tax. Yes, it is
possible. But you must tread carefully, as there are pitfalls along
the way.

Do you want to take your pension somewhere with a low tax
rate?

Gibraltar and Dubai are two excellent options with tax rates at
2.5% and 0%. So if you decide to withdraw your entire pension pot
amounting to £500,000 in your new country of residence, you can
enjoy a tax saving of £150,000 or more.

But here’s the catch – if you return to the UK within the
following 5 years, you will be charged the full tax amount. HMRC
will never allow you to transfer your money and withdraw it
tax-free in Gibraltar or Dubai.

According to the tax director at accountants Grant Thornton,
Mike Warburton, returning to the UK in less than five years after
you left will place you under the temporary non-resident rules. So
if you want to enjoy a low to zero tax pension withdrawal, you must
live in the country you moved in for the next five years, before
returning to the UK.

For more information on the tax rules on cashing in your private
pension, refer to tax experts. Avoid costly mistakes at all
cost.

If you need to find out more about tax on your UK pension
speak with one of our tax agents at info@taxback.co.uk



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