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Where Taxpayers and Advisers Meet

Offshore pension and non-residency

mgd54
Posts:1
Joined:Mon Feb 26, 2024 10:29 am
Offshore pension and non-residency

Postby mgd54 » Mon Feb 26, 2024 12:25 pm

Hi,

I am a foreign national and have lived in the UK for the last 25 years. I have an offshore pension trust in Jersey with all the pension contributions made by a past employer and myself prior to April 2006 while I worked in the UK. I am allowed to draw the whole pension as a lump sum once I turn 50 (next year). I plan to move overseas next year and make sure I am non UK resident for tax purposes before getting the lump sum.

1. My understanding is that no taxes on the lump sum would be due in the UK. Is that correct?
2. I also understand that, should I become UK resident for tax purposes in the 5 years following the payment of the lump sum, taxes could become due in the UK. Could you explain why?

Many thanks,
Marc

Jholm
Posts:389
Joined:Mon Mar 11, 2019 4:22 pm

Re: Offshore pension and non-residency

Postby Jholm » Wed Feb 28, 2024 2:44 pm

Refer to the double tax treaty between the UK and whichever country it is that you are planning on living in. This will guide you as to the treatment of pension income.

Re: 5y... you are referring to the temporary non-residence rules. These are anti-avoidance rules to stop this kind of planning (eg. leaving the UK to obtain favourable tax treatment and then immediately returning).


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