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Post by Fletchsmile on Jun 1, 2018 13:11:41 GMT 7
That's a reasonable summary from Blacktower, rgs. It's clearly aimed at them pushing QROPS to make money from you though  and they've worded it in their favour of that A couple of comments: 1) The Thai tax is pretty much as I said in my post. Though they try and make it sound a bit worse than it is, and that you may be exposed. Yes you may potentially in theory be liable to up to 35%, as their scaremongering states, but unlikely in practice. I don't know anyone that suffers 80% as they try and scare you with. A little planning and there is nothing to worry about on the Thai side, it easily becomes zero, so only UK tax to worry about. 2) IHT. They have overplayed this as a risk. Presumably to sell their QROP. The basic rule is pretty simple, and they deliberately avoided it to make it look worse than it is. Simplifying if you die under 75 there won't be IHT for your beneficiaries. They've deliberately omitted this and just said you may have to suffer. here is more complete details from HL: 3) UK income tax element is a reasonable summary. As Chiangmai says, no surprise that UK tax and allowances need to be factored in. I'd just add, You mentioned a 300k pot. So would be unlikely to be close to the top rate of UK income tax, worst rate scenario they mention |
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AyG
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Post by AyG on Jun 1, 2018 13:37:57 GMT 7
That's a reasonable summary from Blacktower What that summary does not mention is a very key point: a Thai resident* would have 25% of the transfer value immediately deducted as tax. I struggle to think of a scenario where a Thai resident would now be better off with a QROPS than with a UK SIPP. * And residents of most other countries. |
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Post by Fletchsmile on Jun 1, 2018 14:41:08 GMT 7
rgs in dealing with my UK pension pot. Some of my strategies include: 1) I left any occupational defined benefit schemes/ final salary schemes as they were. Generally they give other benefits often useful (e.g spouse's pension if you die) 2) I consolidated any defined contribution/ money purchase schemes, where you have a pot of money, into a Hargreaves Lansdown SIPP. That was a decade or so back though 3) I stopped contributing to any UK private pensions When it comes time to take my private pensions I'll probably use the following strategies: 1) Defined benefit schemes/ final salary schemes. Take as early as allowed and receive the salary each year 2) Defined contribution/ money pots. Take as early as allowed, and then minimise tax. 2 likely scenarios. In either case I would take the 25% tax free lump sum if rules permit first. From there, 2 likely scenarios: i) Buy a joint life annuity, just so my wife has some guaranteed income that can never be touched. Annuity rates are currently poor though. This is the least likely option, but possible for a part or I may do all, just for the guaranteed element. Note: my pension pot is smaller than other investment portfolios, such as ISA, held in Thailand, held in Singapore etc ii) More likely set up a pension drawdown facility. After taking the 25% tax free, I would take out as much as I can each year while minimising tax. I've no worries about the pot running out as I've other sources of income, so am not relying on it. I just want in my hands as quickly and tax efficiently as possible. I have no significant taxable UK income, as it's all either been moved overseas, or put in PEPs/ISAs year back. Given that the private pension age you can take say a SIPP is 55 (used to be 50 before the barstewards changed it to 55). And given that the state pension age for me will be 67 or later, that means I have 12 years where it is the only taxable income I have in the UK, until the state pension kicks in. So in those 12 years I will likely take out as much as is covered by the personal allowances - currently 11,850 per year tax free. Depending on someone's pot size they could take a bit more at low tax rates. Because once I hit state pension age, I can broadly bank on my state pension taking up the lion's share of my personal allowances, and I'll be paying tax on my private pensions/SIPP. Hence get as much out as possible in the gap between starting my private pensions and the state pension (lottery) possibly starting if the goalposts haven't moved
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Post by rgs2001uk on Jun 1, 2018 22:02:12 GMT 7
FWIW, rxd this today from Blacktower That's pretty shocking. I agree, however it is what it is, posted for information purposes only. |
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Post by rgs2001uk on Jun 1, 2018 22:08:17 GMT 7
That's a reasonable summary from Blacktower, rgs. It's clearly aimed at them pushing QROPS to make money from you though and they've worded it in their favour of that A couple of comments: 1) The Thai tax is pretty much as I said in my post. Though they try and make it sound a bit worse than it is, and that you may be exposed. Yes you may potentially in theory be liable to up to 35%, as their scaremongering states, but unlikely in practice. I don't know anyone that suffers 80% as they try and scare you with. A little planning and there is nothing to worry about on the Thai side, it easily becomes zero, so only UK tax to worry about. 2) IHT. They have overplayed this as a risk. Presumably to sell their QROP. The basic rule is pretty simple, and they deliberately avoided it to make it look worse than it is. Simplifying if you die under 75 there won't be IHT for your beneficiaries. They've deliberately omitted this and just said you may have to suffer. here is more complete details from HL: 3) UK income tax element is a reasonable summary. As Chiangmai says, no surprise that UK tax and allowances need to be factored in. I'd just add, You mentioned a 300k pot. So would be unlikely to be close to the top rate of UK income tax, worst rate scenario they mention Agreed, if I didnt know any better I might actually believe it, . Fletch, the 300k was for example purposes only and isnt the value. Would be interested to see what is offered and how much I can drawdown each year, I am under no illusions, its nothing more than a money making scam, hook me up with some fly by night company in Malta or wherever, charge me 1,000 quid per year for the privilege, and restrict me to a max drawdown of example 5,000 quid per year, I will probably never live long enough to get my money out. |
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Post by rgs2001uk on Jun 1, 2018 22:11:36 GMT 7
That's a reasonable summary from Blacktower What that summary does not mention is a very key point: a Thai resident* would have 25% of the transfer value immediately deducted as tax. I struggle to think of a scenario where a Thai resident would now be better off with a QROPS than with a UK SIPP. * And residents of most other countries. Correct me if I am wrong, isnt a qrops just an offshore sipp, as mentioned, why would I consider it. I have an ample supply of KY jelly, take one for the team, . |
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chiangmai
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Post by chiangmai on Jun 2, 2018 5:50:37 GMT 7
Would be interested to see what is offered and how much I can drawdown each year, I am under no illusions, its nothing more than a money making scam, hook me up with some fly by night company in Malta or wherever, charge me 1,000 quid per year for the privilege, and restrict me to a max drawdown of example 5,000 quid per year, I will probably never live long enough to get my money out. Drawdown in the UK is based on the GAD tables which are linked to the value of Gilts, the amount of capped drawdown is reviewed and rest every three years. There's plenty of GAD table calculators on the net, here's one...just plug in the amount. www.gov.uk/government/publications/drawdown-pension-tables, or citywire.co.uk/new-model-adviser/news/hmrc-updates-gad-tables-triggering-drawdown-limit-changes/a986549I suspended payments to me from one of my drawdown pensions which helps enormously with tax planning in any given year. My plan for those funds, since they are tax free, is to continue to let them build and then pass on the total value to my wife when I pass on! |
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AyG
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Post by AyG on Jun 2, 2018 9:10:30 GMT 7
Correct me if I am wrong, isnt a qrops just an offshore sipp, as mentioned, why would I consider it. IIRC, the benefits (some of which do vary between jurisdictions) are/were: - ability to take 30% lump sum vs. 25% with SIPP - no (or very little) income tax on income - no (or very little) inheritance tax - ability completely to cash in your pension pot* - no Lifetime Allowance limit - the warm and fuzzy feeling of stuffing it to the UK tax man * I have an ex-QROPS and know that I could cash it in 100% if I wanted to (which, for personal reasons I don't, but for most it would be a sensible idea since the costs associated with having a QROPS are substantially higher than simply having a GIA). I don't know whether or not this option is available for current QROPS. I'm pretty sure, however, it wouldn't be available in the first 10 years. |
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and they've worded it in their favour of that
