Not sure if this forum is new or not used- so I have a question.
I am tax resident in Europe and have a modest pension fund in the UK(£125,000). I have been told that I won't have to pay income tax in the UK if I move my Aviva pension to a QROPS in Malta, Surely this is taxable where I live now? Copying the advice I have been given in a letter from an adviser, these are the reasons given for moving it-
1. No UK Income Tax payable
2. No Inheritance Tax payable
3. No Lifetime Allowance
4. Access to non-UK indexes and funds
5. Great flexibility
Anyone there care to comment?
Good morning Nomad.
This is a new forum, slightly delayed as we had an issue with Spam.
We cannot give specific advice on here but can clarify rules and raise questions about advice given and provide very generic advice.
If we may go through your points.
- Read the Double Tax Treaty between the UK and your current tax residency. Did you know you can apply for an NT code for your Aviva Pension and have it paid gross to you- declarable where you are now? Was this not mentioned by the other adviser?
- There is no Inheritance Tax payable on UK pensions generally. Potentially, after the age of 75, there may be no tax payable via a QROPS- but that can be mitigated by careful planning. And, do you really think the tax rules will be the same when you are 75 as they are now (unless you are close to 75 now)?
- By the time you retire, your pension will have to be well over £1 million in value to pay any Annual Allowance Charge. Unless you have large UK pensions elsewhere, is this realistic?
- A good UK pension will allow access to more funds (UK and non-UK) than most investors will ever need. Moving to a QROPS will often get you access to more costly funds that benefit the adviser in many cases unless transparent fees are agreed in advance.
- Malta QROPS are no more flexible than UK pensions and this has been the case since 2015.
Based on what you have told me, the advice to move to a QROPS appears questionable. Here is a question for you- what would a QROPS give you that your current pension does not? (in your own opinion).
Admin
@adminJ - what happens to your answer if i live in the UK and have a QROPS?
In such a case, we would recommend you speak to an FCA regulated IFA with experience in dealing with offshore products. Unless the fund is very substantial it is highly likely that it would be better placed back into a UK regulated registered pension.
But, beware, some funds and wrappers inside QROPS have high exit fees as do some of the QROPS and so you would need to take advice before doing anything.
Were you UK resident when you transferred to the QROPS?
great help thanks
