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Yes, it is possible for you to transfer your pension abroad provided that you have a defined contribution pension in the UK, which has been either arranged by you or your employer. 

  • You can either leave your pot in the UK and take your money from abroad
  • Transfer your entire pot abroad with you

There are a number of steps you need to take, to ensure that your pension is transferred securely overseas, and certain things you need to be aware of, before making the decision to transfer your pension abroad.


Moving Your Pension Overseas 




If you would like to move your pension abroad, then it is vitally important that you make sure that your pension pot has been moved into a qualifying recognised overseas pension scheme, or you risk getting charged a considerable amount of tax.


What Is a Qualifying Recognised Overseas Pension Scheme? 




Qualifying recognised pension schemes, otherwise known as a QROPS, refer to pension schemes that can viably be taken abroad.

It is highly recommended that you choose a QROPS scheme, otherwise you may find that your UK pension scheme will refuse to do the transfer. Equally, you may be required to pay up to 40% tax on the transfer abroad by your UK pension scheme.


How Do You Find a QROPS Scheme?




It is your responsibility to find a QROPS scheme, but the process of finding one has been simplified as you can check the QROPS list across the world on the website which is categorized by country.

However, keep in mind that the HMRC is not able to fully guarantee that these are all QROPS, nor that transfers to these schemes will be completely tax free. It is up to you to find out through your chosen pension provider abroad if any tax will need to be paid on a transfer of pension savings.


Will I Need to Pay Tax on a Pension Transfer? 




Some people may need to pay tax when they transfer to a QROPS if the scheme is based in a certain location, and some will not. It will be your responsibility to find this out.

However, you will typically not need to pay tax on a pension transfer to a QROPS scheme if this has been provided by your employer. This is not always the case so always check with your scheme beforehand and check the terms and conditions.

Furthermore, if you had asked for a pension transfer to a QROPS scheme before 9 March 2017, then you will not be required to pay tax on this transfer.


Tax and Pension Transfers Around the World




There will be different tax implications based on whether you move within the European Economic Area (EEA) or outside of it.

You will be required to pay 25% tax on your scheme only if you:

  • Move outside of the EEA within the next five years
  • You reside outside of the EEA
  • No tax if you move to an EEA country within 5 years of the transfer


Things to Remember Regarding Tax When Taking Your Pension Abroad




You may have to pay the tax for using your pension in the new country of residence and the UK too – depending on which scheme you select.

If you know you will be going abroad for your retirement, it is vital that you tell HM Revenue and Customs beforehand, so that you pay the right level of tax for your pension.

You should also keep in mind that overseas tax laws may prevent you from taking anything from your pension completely tax free.


Is It Possible to Still Receive a State Pension Abroad? 




Yes, if you qualify for the State Pension, it will still be possible for you to receive it overseas.

For more information on pensions, and other financial products to support you during retirement, please visit our blog.

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