Whether you have reached retirement age and want to move to a new country or you are looking to just work abroad for a few years you will have to deal with transition. The major stumbling block for this is often your pension, the hassle of having to transfer it so that it can be withdrawn abroad or adding to your existing savings is often too much bother for some people and it ends up putting them off their once in a life time move. In this article I will clearly outline the exact steps you need to take in order to transfer it abroad.
When transferring your pension it is possible you may have to pay tax on the transaction depending on the country you are sending it to and whether they have a qualifying recognised overseas pension scheme (QROPS). These are the qualifying factors of an overseas pension:
- Must meet the requirements set by UK law
- Pension scheme must notify HMRC
- Must broadly mirror the way a UK pension scheme works
- Lump sum must be payable upon retirement in scheme
Before going ahead with the transfer of your pension to another country you must complete a checklist, this can be found on the HMRC website. It includes things such as name, date of birth, national insurance number, UK address, phone number, name and address of the QROPS and the country is was set up and is regulated in. After this you must sign a statement saying you agree that if you transfer doesn’t comply with QROPS then you understand that you must pay tax on it. This information must be completed within 60 days of letting the administrator know of your intentions to move.
What taxes do I have to pay?
Presuming that you adhere to the QROPS then the only other taxes you may be liable to pay are if you are transferring a lump sum that would normally be charged tax in the UK, if that is the case then you still have to pay the tax. If you leave the country part of the way through a financial year or you have been self employed/completed a self assessment in the previous five years then you may still be liable to pay tax before leaving.
A pension transfer can be a very complicated process with hidden costs so often it is a good idea to perhaps get in touch with a company that specialise in it. They can offer you advice and advise you how much tax you will have to pay. They are a form of accountants that deal purely in pension transfers.
Author Bio: Sarah Hewitt is a new blogger who blogs about anything and everything. You can contact her via her Twitter page or Google+