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Post by Fletchsmile on May 23, 2018 17:29:52 GMT 7
UK pensions can be useful vehicles from a tax perspective for providing for you retirement and after
Two of the most annoying tings about them though are the ever shifting goal posts/ rule changes, and accessing your pension.
For the latter, in private money purchase schemes, you used to be able to draw a lump sum in some cases, but then have to buy an annuity with the rest of it.
One improvement for the better though, was the introduction of pension draw downs, where you no longer had to buy an annuity, but could take a lump sum and then other amounts in a more flexible way.
There are some complex rules around this. But definitely some benefits to consider.
I thought it might be worth a thread on the subject. Particularly as things change
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Post by Fletchsmile on May 23, 2018 17:44:04 GMT 7
Below is a useful guide from Hargreaves Lansdown. You can download it at the following link
Or attached are 2 zip files. I had to split it into 2 as it exceeds the forum 1Mb limit for file attachments, so they are in zip files not original .pdf
One thing to be aware of is that you can still contribute to a pension in drawdown and get some tax relief, but there are some important rules around that.Page 20 "Making Contributions" describes some of the rules.
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Post by Fletchsmile on May 23, 2018 17:52:28 GMT 7
Also important to read is this attachment around annual allowances. Also the MPAA limit of 4k if someone wanted to contribute to money purchase plans/personal pensions if you flexibly access your pension
Also the rules around recycling if you are adding to a pension in drawdown if you don't want to fall foul of rules on using your lump sum to contribute more to get tax relief
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Post by rgs2001uk on May 23, 2018 21:43:27 GMT 7
Glad you brought this up, I am in the process of changing my mind about pensions.
I posted recently about a former work mate and his pension pot, over 1 million pommie pesos if he cashed in, I will admit I was sceptical at first. Have since done some research ref my pot, I was shocked, in a pleasant way, at just how much mine is worth.
Not mentioned, UK laws have changed, you will now be hammered for 25% tax, depends on what country you live in, etc etc.
My first pension doesnt kick in until 60, so I still have time to decide what to do.
Have basically punched some numbers into an excell spreadsheet, if I live over the age of 80, I will have lost out, by cashing in.
If I cash in, I basically have 20+ years to turn 75 into 100.
The above is just a quick guide, eg 400k pension pot, minus 25% tax, leaving 300k.
I am NOT interested in Sipps, or drawdown pensions, I just want the cash in my bank account.
As far as I was aware, HL doesnt touch expats?
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Post by Fletchsmile on May 24, 2018 17:38:12 GMT 7
Glad you brought this up, I am in the process of changing my mind about pensions. I posted recently about a former work mate and his pension pot, over 1 million pommie pesos if he cashed in, I will admit I was sceptical at first. Have since done some research ref my pot, I was shocked, in a pleasant way, at just how much mine is worth. Not mentioned, UK laws have changed, you will now be hammered for 25% tax, depends on what country you live in, etc etc. My first pension doesnt kick in until 60, so I still have time to decide what to do. Have basically punched some numbers into an excell spreadsheet, if I live over the age of 80, I will have lost out, by cashing in. If I cash in, I basically have 20+ years to turn 75 into 100. The above is just a quick guide, eg 400k pension pot, minus 25% tax, leaving 300k. I am NOT interested in Sipps, or drawdown pensions, I just want the cash in my bank account. As far as I was aware, HL doesnt touch expats? People struggle generally with opening accounts with HL as expats.
If you have other accounts with them already though it is easier.
I had PEPs, ISAs, ordinary portfolios with them and decided to consolidate my pensions (excluding one defined benefit company scheme) with them. Process was easy and they handled it all well. This was also over a decade back though and I know it's tougher now
I remember looking at their website a couple of years back. It said generally where they wouldn't accept overseas customers on various things. However, pensions were an exception at that time, and they would consider pension transfers. Might be worth touching base with them, saying you are a UK citizen with a UK pension pot, but living overseas.
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Post by Fletchsmile on May 24, 2018 17:50:30 GMT 7
If looking at pension transfers the following is worth a read of things to think about www.hl.co.uk/important-investment-notesNot sure why you say you don't want a SIPP. You can have your entire SIPP holding in cash if you want. Then just withdraw cash to your bank account according to your needs and being mindful of tax implications. Anything that starts in a pension of whatever kind will have tax things to think about anyway.
There's a guide to SIPPs here.
www.hl.co.uk/free-guides/free-guide-to-sippsHere's the bit I remember them saying about pensions for people outside UK. It says you may be able to transfer to them but won't be able to make contributions. Pensions are a bit different to opening other accounts on this score. www.hl.co.uk/help#sipp,-drawdown-and-annuity/sipp/eligibility/am-i-eligible-for-a-vantage-sipp
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Post by rgs2001uk on May 24, 2018 20:40:08 GMT 7
^^^ cheers, thanks will investigate that further.
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Post by rgs2001uk on May 25, 2018 21:21:07 GMT 7
If looking at pension transfers the following is worth a read of things to think about www.hl.co.uk/important-investment-notesNot sure why you say you don't want a SIPP. You can have your entire SIPP holding in cash if you want. Then just withdraw cash to your bank account according to your needs and being mindful of tax implications. Anything that starts in a pension of whatever kind will have tax things to think about anyway.
There's a guide to SIPPs here.
www.hl.co.uk/free-guides/free-guide-to-sippsHere's the bit I remember them saying about pensions for people outside UK. It says you may be able to transfer to them but won't be able to make contributions. Pensions are a bit different to opening other accounts on this score. www.hl.co.uk/help#sipp,-drawdown-and-annuity/sipp/eligibility/am-i-eligible-for-a-vantage-sipp Sorry my bad, should have read ISA. Did some investigations today, could be hit up for 40% tax. Told the mrs to tell the maid to get my overalls washed and pressed, will need to talk to my mate in HR, might have to head on a punishment posting to Oman to escape the tax. Its not all mai thais and prawn sannies here in the capital, never mind chin up old chap, could be worse.
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chiangmai
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Post by chiangmai on May 27, 2018 19:20:00 GMT 7
FWIW a reply below from HL in Aug last year when I tried to open an account with them:
"Unfortunately we are unable to accept new business from a non-EEA resident due to regulatory issues. There may well be other providers who will be able accept a pension transfer such as the one which you have presented, however unfortunately we are unable to accept such a request under these circumstances.
I am afraid the same would apply with regards to opening a Vantage Fund & Share Account with us".
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Post by rgs2001uk on May 30, 2018 21:51:53 GMT 7
FWIW, the following company doesnt seem to have a problem dealing with expats, www.blacktowerfm.com/Do your own due dilligence, the above is not a reccomendation. The following link may be of use to some, www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/income-drawdown/what-is-income-drawdown-apsqg6y8pg57In particular this, www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/income-drawdown/compare-pension-drawdown-plans-and-charges-ax1628r13rdkHowever lets get the above nit noi crap out the way, my main concern is this. www.gov.uk/tax-on-pension/tax-when-you-live-abroadIf you’re not a UK resident, you don’t usually pay UK tax on your pension. But you might have to pay tax in the country you live in.Assuming I live abroad and my pension is in excess of the allowance, will I be taxed or not? I am slowly coming round to the school of thought, if I am going to be hung for a lamb, I may as well be hung for a sheep. If I am going to be taxed, I may as well head head back to jolly ole blighty and take whats on offer, eg free healthcare etc etc. PS, chiang mai, any decent deals going on those flats you bought in Lancaster, cash buyer awaits, the mrs has her bags packed already, .
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Post by Fletchsmile on May 31, 2018 1:28:32 GMT 7
From a Thai tax perspective any tax on your pension is easily avoided.
As background, UK pensions are generally not covered by double tax agreements. So technically could be are taxable in Thailand. One exception being government pensions for government employees etc. By that exception I don't mean the state pension most people get, that is not covered in the DTA. I mean actual government employees with government pensions, and the government looking after its own.
In practice Thai tax authorities don't seem to have any interest in your UK pensions though. To be extra safe you can always go the route of bringing it in the following tax year. Generally foreign income is taxable anyway only if brought in the year it's earned. i.e save it up in a separate bank account and transfer to Thailand on say 2nd Jan each year.
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chiangmai
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Post by chiangmai on May 31, 2018 6:01:51 GMT 7
Whilst I understand that pensions are not usually taxable in the UK, if it were me in that situation I would be more concerned about the eventual removal of the Personal Allowance from expats, I can't see that not happening at some point but that's just me. As for flats: there's a number of locations around the UK that offer one bed retirement flats or similar, they tend to be cheaper than regular flats but come with a monthly service charge which is often not cheap (figure £250 month). So there's a trade off between initial cost versus monthly outgoings when you're deciding what type of unit to buy, I got lucky and found a flat that offers both with a reasonable initial cost and a service charge of only £40 per month. The flats are really duplexes, purpose-built houses with one flat up and one down, built around gardens and in a nice location they negate the need for a car. These are not the sort of flats a 40 or 50 year old might want to buy necessarily, at that age you're in peak earning years and have grander property ideas, you're probably also still raising a family. But as a person ages their accommodation needs become much simpler, for me the UK flat is somewhere to sleep and eat and not much more than that, our home in Chiang Mai will continue to be the place I regard as home and once the UK novelty has worn off, I can easily see us renting it out and living full time in Thailand once again. Here's one that I almost bought but found a better option, if nothing else it'll give you an idea: www.primelocation.com/for-sale/details/44976006?search_identifier=b992495a86bd59429358fd3ea0c4d29c
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Post by rgs2001uk on May 31, 2018 22:02:17 GMT 7
FWIW, rxd this today from Blacktower, From this company, www.stmgroupplc.com/Wrote back saying that was from 2016, pls give updated version.
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AyG
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Post by AyG on Jun 1, 2018 8:38:52 GMT 7
FWIW, rxd this today from Blacktower That's pretty shocking.
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chiangmai
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Post by chiangmai on Jun 1, 2018 9:19:30 GMT 7
I had always understood that to be the case and I don't understand why people should be surprised - taxable income that arises in the UK is subject to UK tax, which in turn is subject to Personal Allowance limit, just because a person has a Thai tax ID doesn't negate the Personal Allowance.
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