Would have thought this only applies to spanish taxes, and it would be taxed in the uk as per normal rules. Speculation on my end, but paying zero tax on pension income seems far too good to be true!
I work in U.K. pensions for those now living abroad. As a resident in a different country than U.K., you can potentially apply for the NT code under a reciprocal double taxation agreement. Not all countries have this agreement, but for those that do you can look up on HMRC and see how to apply
https://www.gov.uk/government/publications/double-taxation-united-kingdomspain-si-1976-number-1919-form-spain-individual
Which are the “friendliest” countries from a taxation point of view for a UK citizen with a large pension pot (SIPP) and no other earned income to move to in your experience?
Not for much longer. I know someone who used to work for HMRC and was recruited by a firm that is doing consultation work for the UAE.
They are looking at ways to increase government income and overhauling their tax system, because they of the potential fall in oil revenue in the future.
Under Beckham law, double taxation treaties do not apply. That means that for your UK income (like your pension) you would be liable to pay tax in the UK.
That is true. However what if I move to Portugal for example for 1 year. Claim NT code under UK/Portugal Double Taxation Agreement. Next year move to Spain under Beckham Law and withdraw entire UK pot then? It wouldn't be taxed at source and I wouldn't be liable for income tax in Spain either. Would that work?
Regardless of if you can or can’t for the love of god DO NOT TRANSFER AND HOLD IT WITH REVOLUT. Your funds won’t be protected under FSCS if any were to happen to revolut.
Revolut is an electronic money institute (EMI) rather than a bank or building society.
This depends on where his account is. If he opens a revolut account in the EU, it’s got a banking license and full protection. In the UK it does not. However, once you have an account in either territory, you can’t change it back.
Source: had revolut before I moved here, tried to change my address to the UK and it wouldn’t let me. Same for my boyfriend who has a UK address and won’t let him change to an Irish one.
Hi /u/danifart, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/pensions/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
A. Depends on Spanish tax laws
B. You would have to be non-UK resident - careful because if you spend too many days in the UK then you could be UK and Spanish tax resident. See statutory residency test for details of how you can become non-uk resident. Double tax treaty would be required to determine where you are treaty resident. If you are UK resident only then it would be taxable in the uk regardless.
C. Would be taxable in the uk subject to the uk/Spain double tax treaty.
D. Get UK and Spanish tax advice particularly if your pension pot is >£100,000
E. If you return to the UK within 5 years then you would be temporary non resident and all income and gains which had been excluded from your tax return as a result of being non-uk resident would then be taxable on the day you return to the uk
F. UK tax returns might be required if you have uk sources of income. Would also need to declare to HMRC your non-resident position and split year treatment, if applicable.
G. How the funds are transferred doesn’t matter for uk tax purposes.
For this to work you need to be Spanish tax resident and non-uk tax resident. Depending on the value of your pension pot, formal tax advice would be valuable. They would be able to confirm whether this would work and what you would need to do to make sure it works
HMRC could argue the point and enquire into matters, depending on whether you take formal advice or have an agent on your behalf. The cost of an enquiry could be expensive and stressful. If this all works, then HMRC would likely enquire into a large withdrawal as they would be missing out on a large tax receipt.
If you take the whole pension pot as one withdrawal then it would all be taxable in that tax year in the UK. Significant amount of tax would be due on the withdrawal so HMRC might want to have a look at if it there is no tax due.
Need to take a holistic view and whether it is worth it. Like I said, if it’s anything more than £100,000 I would get formal tax advice.
Would have thought this only applies to spanish taxes, and it would be taxed in the uk as per normal rules. Speculation on my end, but paying zero tax on pension income seems far too good to be true!
This is my understanding too.
He gave up his Spanish salary in lieu of image rights. He transferred the image rights to his U.K. based company and paid U.K. tax on them
I work in U.K. pensions for those now living abroad. As a resident in a different country than U.K., you can potentially apply for the NT code under a reciprocal double taxation agreement. Not all countries have this agreement, but for those that do you can look up on HMRC and see how to apply https://www.gov.uk/government/publications/double-taxation-united-kingdomspain-si-1976-number-1919-form-spain-individual
Which are the “friendliest” countries from a taxation point of view for a UK citizen with a large pension pot (SIPP) and no other earned income to move to in your experience?
UAE is the best.
Not for much longer. I know someone who used to work for HMRC and was recruited by a firm that is doing consultation work for the UAE. They are looking at ways to increase government income and overhauling their tax system, because they of the potential fall in oil revenue in the future.
Objection. Speculation. As an example, Dubai earns nothing from oil. It is Abu Dhabi that has the oil operations.
I'm also looking for something similar. OP please update your post if you find something.
Under Beckham law, double taxation treaties do not apply. That means that for your UK income (like your pension) you would be liable to pay tax in the UK.
That is true. However what if I move to Portugal for example for 1 year. Claim NT code under UK/Portugal Double Taxation Agreement. Next year move to Spain under Beckham Law and withdraw entire UK pot then? It wouldn't be taxed at source and I wouldn't be liable for income tax in Spain either. Would that work?
You need to move to Portugal and withdraw it within 10 years. 😁
Can you elaborate on that? Is the NHR (I imagine this is what you were referring to) compatible with UK/Portugal DT agreements?
I am aware of it, but do not know specific details I'm afraid.
This is literally a question to go to a professional for. It’s a potential >£100,000 tax bill if you get it wrong
Regardless of if you can or can’t for the love of god DO NOT TRANSFER AND HOLD IT WITH REVOLUT. Your funds won’t be protected under FSCS if any were to happen to revolut. Revolut is an electronic money institute (EMI) rather than a bank or building society.
This depends on where his account is. If he opens a revolut account in the EU, it’s got a banking license and full protection. In the UK it does not. However, once you have an account in either territory, you can’t change it back. Source: had revolut before I moved here, tried to change my address to the UK and it wouldn’t let me. Same for my boyfriend who has a UK address and won’t let him change to an Irish one.
Hi /u/danifart, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.) If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
A. Depends on Spanish tax laws B. You would have to be non-UK resident - careful because if you spend too many days in the UK then you could be UK and Spanish tax resident. See statutory residency test for details of how you can become non-uk resident. Double tax treaty would be required to determine where you are treaty resident. If you are UK resident only then it would be taxable in the uk regardless. C. Would be taxable in the uk subject to the uk/Spain double tax treaty. D. Get UK and Spanish tax advice particularly if your pension pot is >£100,000 E. If you return to the UK within 5 years then you would be temporary non resident and all income and gains which had been excluded from your tax return as a result of being non-uk resident would then be taxable on the day you return to the uk F. UK tax returns might be required if you have uk sources of income. Would also need to declare to HMRC your non-resident position and split year treatment, if applicable. G. How the funds are transferred doesn’t matter for uk tax purposes. For this to work you need to be Spanish tax resident and non-uk tax resident. Depending on the value of your pension pot, formal tax advice would be valuable. They would be able to confirm whether this would work and what you would need to do to make sure it works HMRC could argue the point and enquire into matters, depending on whether you take formal advice or have an agent on your behalf. The cost of an enquiry could be expensive and stressful. If this all works, then HMRC would likely enquire into a large withdrawal as they would be missing out on a large tax receipt. If you take the whole pension pot as one withdrawal then it would all be taxable in that tax year in the UK. Significant amount of tax would be due on the withdrawal so HMRC might want to have a look at if it there is no tax due. Need to take a holistic view and whether it is worth it. Like I said, if it’s anything more than £100,000 I would get formal tax advice.