Transfer your UK pension abroad to reduce or eliminate taxation on your UK pension. If you are retiring abroad, you should look into transferring a UK pension overseas to get your pension out of the UK tax net.
Even with the new pension flexibility in the UK, these new pension freedoms are introducing all sorts of new tax issues.
For a start, if you cash in your pension, you will automatically be subjecting your entire pension to 40% inheritance tax immediately. You will also be taxed on the emergency tax code, which could mean up to 45% income tax immediately. You would then have to fill out tax forms at the end of the tax year to reclaim the overpaid tax.
By transferring a pension overseas you are avoiding up to 45% income tax. Your beneficiaries will also avoid the 45% tax on a lump sum, if they want to receive your pension if you die after 75.
The average age of death in the UK is around 86 for men and 88 for women once you reach 65, so this will affect most people.
You also have the chance to transfer your pension to other currencies such as USD, EUR or GBP. If you have a final salary pension, you will give up certain guarantees that link your pension to inflation, so you need to make wise investment choices.
For the ultra conservative, you can park your pension in cash or bonds. For those who wish to take more risk, you can purchase some mutual funds or ETF’s. You can also further diversify to purchase precious metals such as silver or gold or invest in property funds.
Please ask us about our pre-designed portfolios to optimise your pension and maximise returns.
Please visit http://www.qropsspecialists.com for more information.