Pension freedom or tax windfall?

 For qualified advice, contact me at john.hayward@spectrum-ifa.com or call me on (+34) 96 558 7633 / 618 204 731


Pension planning for expatsAre you prepared for the pension changes?

If you are 55, you may have the option to access your entire pension fund that has not already been committed to some form of income.

What can you do with the money?

You have the freedom to do whatever you wish with the money. The pension minister Steve Webb even suggested that people could purchase a Lamborghini if they wanted to. The size of the fund would obviously affect that decision. Assuming you do not spend it all on a new car, what do you do with the rest? Low interest rates are here for some time to come.

Is your pension fund liquid to allow an immediate pay out?

Unfortunately for some people, their money is tied up in suspended funds which means that they cannot sell until the fund manager allows the sale.

How much tax will you pay when you release your money?ID-100269075

The amount of tax will be dependent on the size of the fund. A UK company paying you will hold back tax until they allow a reclaim for, say, a Spanish tax resident. How long it will take to process the reclaim is unknown. Spain, in this case, will be very interested in this inflow of cash and we will see how the new exchange of financial information will work.

How much future tax will you pay on the proceeds?

Depending on what you do with the money, do you know how it will be taxed?

Will your QROPS provider allow you to cash in?

Some jurisdictions may not allow you to transfer out as a lump sum. There are solutions to this.

Should you move your money to a QROPS?

Taxation on death benefits is changing, most notably for those under 75. Up to now, the tax on death has been one of the main reasons for people to transfer to a QROPS.

Now is the time to review your pension fundID-100288918

There are many considerations when making the decision on how you take your pension benefits. A short term solution could turn into as long term tax problem. We can help you decide what is best for you.

For qualified advice, contact me at john.hayward@spectrum-ifa.com or call me on (+34) 96 558 7633 / 618 204 731