Expats including India based UK expats should know that they
can no longer depends on the financial favors from UK Government anymore
irrespective of whether they are in or out of the UK tax system. It looks UK
Government is making clear on this part to UK expats.
For the information of UK expats there would be a
consultation to consider scrapping the personal income tax allowance for
expats.
When it comes to a question that who receives the allowance,
it totally depends on the definition of an expat. From the tax point of view,
an expat is no longer a UK resident & the member settles in another country
& pay taxes there itself. Even though it does looks like UK Govt has liberated
pensions, they are still decided to
collect for Treasury.
So switching one’s Onshore pensions to an OFF Shore QROPS is the
solution to get out of this tax trap.
On switching Onshore pensions to a OFF Shore QROPS like
switching to a jurisdictions like India, Gibraltar, Malta etc., the member pays
income tax on the pension payments in the country where he is tax resident ,
not at UK tax rates. The tax rates vary considerably from country to country.
For example, on transferring to a Gibraltar based QROPS the
investor ends up paying just 2.5% income tax on pension income & also can
withdraw 30% tax free lump sum on attaining age 55 .
Also, QROPS pension benefits can be taken in terms of any
major currencies & not just in GBP ,that can be credited into member’s
personal bank account directly. So that there is no foreign exchange worries.
Most of the QROPS providers do accept small UK pension pots
also that are less than 75000 GBP. This will help many expat pension investors,
those who got an average pension pot of 38,000 GBP.
About 80% of the Indian expatriate's
have savings in an existing UK pension fund but are considering retiring in
India and few percentage of them in other countries outside UK.
The
QROPS program was launched on 6 April 2006 as a part of new legislation with
the objective of simplifying pensions. Typically this occurs when a Indian UK
resident leaves the UK to permanently emigrate (or to retire abroad) having
built up a pension fund within a scheme approved by HMRC or when a person born
in India who has built up benefits in a HMRC approved UK Pension Scheme decides
to return to his home country or abroad with
an expectation of retiring there.
Please contact me for
an informal chat about the transfer scheme, finding right QROPS scheme in India
and in OFF Shore jurisdiction to get your UK pensions transferred and
Retirement planning with my following Contact details.
Mr Ravi Kumar.
Financial Consultant. Exide Life Insurance Co Ltd (formerly known as ING Life Insurance Co Ltd)
28, 6th Floor,
Centenary Building, Adjacent to Raheja Towers, M.G Road, Bangalore-560
001.
Cell: +91
9980927393, +91 9844519872
Email:
ravi.sampige@gmail.com
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