Transferring UK Pensions To The UAE
Are you a British expat living in or moving to the UAE and looking to transfer your UK pension overseas? Our team of qualified pension experts are on hand to help.
If you’re unsure of where to start in terms of financial advice or don’t know which pension provider to go with, you’re in good hands with Brite. For friendly and professional advice on how to transfer your pension and which personal pension is best for you, contact Brite today!
Choosing to transfer to an overseas
International pension transfers are a popular way for expats to reap the rewards of their pension pots and the personal income they’ve attained over the years. What makes them so appealing is largely due to the tax benefits they afford, as pension taxes work differently depending on the tax regulations of your new country of residence.
By moving your pension abroad, you can potentially avoid the tax charges a UK pension might accrue, as well as avert any other additional charges that might be added. It’s worth noting that the amount you might save depends largely on the country you move to and the overseas pension scheme you decide to use.
An increasingly popular destination for retirement, many Brits choose the United Arab Emirates (UAE) to see out their later years. But, before investing in a new pension scheme or committing to a pension transfer, it’s important to look at all the information available to you, as well as check out the regulations and how the law will affect you in such a situation.
Our team of trusted pension experts deliver the best pension advice on the market, whatever pension plan or type of scheme you choose to go for.
Overseas pension transfer: What fees might apply?
If you have a sizable amount of pension savings and are planning on moving abroad, then an overseas scheme could be a great option for you. However, before making the move, it’s important to have a clear idea of what fees and charges might be involved, which is something one of our financial advisers will be able to help with.
If you have reached retirement age or are 55 and over, you will be able to withdraw your pension in a number of different currencies – picking the right one might help you to avoid additional taxes and fees. Once you have decided to move your pension funds to an overseas scheme, you may no longer be subject to future UK legislation changes or UK income tax.
There are several ways in which to do this, if you’re thinking of becoming an overseas resident in the UAE.
How do I transfer my UK pension
To transfer your pension funds to an overseas pension scheme, you need to take out what is known as a ROPS (Recognised Overseas Pension Scheme). You will also need to meet a set of eligibility requirements to qualify for a ROPS You don’t need to be at the national British age of retirement to transfer your pension savings abroad, but you do need to be over the age of 55 to draw down your money, and you must be a non-UK resident to do so. The new double-tax treaty, which was instituted in 2016, means that British expats over this age who live in the UAE may be able to take their pensions completely tax-free, showing one of the main benefits of transferring your UK pension overseas.
The UAE is known for being a largely tax-free nation. It doesn’t charge income tax nor many of the other taxes that you would find in the UK. This is one of the core reasons why many people choose a UAE residency, especially during their retirement years.
What do I need to know before transferring my UK pension to the
One thing to be aware of is the overseas transfer charge – this was introduced by the UK government and came into effect from March 2017. The Overseas Transfer Charge
The overseas transfer charge only applies to certain countries (usually countries not within the EEA). For the UAE, it does apply if you don’t also live there. A charge of 25% of the value of the funds transferred to your overseas pension scheme would be levied in this situation, so this is something you need to be aware of, especially if you’re not planning on living there.
If moving ahead with this plan, your current pension funds will be transferred to a ROPS in the UAE, allowing you to make the most of your pension income and potentially avoiding some of the tax trappings of keeping your pension in the UK – this works out best if you have a larger amount of money in your pension pot and if you decide to live in the UAE. You should also note that state pensions or pensions that are part of an unfunded civil service pension cannot be transferred to a ROPS.
The UK lifetime allowance
The UK currently has a lifetime allowance for tax-relieved pensions of £1,073,100, which essentially means that you pay tax if your pension rises above this amount.
If you’re under the age of 75 and your pension has already reached this threshold before deciding to move your pension to a ROPS, you may be faced with a 25% fee on the excess funds. However, by transferring to a QROPS before the lifetime allowance has been reached, you could actually reduce these charges, particularly if you think you might hit the lifetime allowance at some point.
There are also admin charges and set-up fees that you will need to consider, which is something we’ll guide you through along the way.
If you would like to find out more information about transferring your pension to a ROPS, our financial advisers will work with you to customise the right pension solution. Maximising your pension income just got easier!
Why Should You Transfer Your UK Pension With Brite?
Over the years, Brite have advised thousands of people. With our low-cost investment platform, we help pension holders get the most out of their pension assets. We offer an all-in-one service, including advice, transfers, pension administration and scheme management, so you can rest assured that Brite will do all the hard work for you.
If you’re considering transferring your UK pension to an overseas pension scheme and want to find out how Brite can help, then you’re in the right place – contact us today to get started!
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