It might be your dream to retire to a villa by the sea. If you wanted to use a pension lump sum to facilitate this, is it more beneficial to take this before or after you leave the UK?
If you are a tax resident overseas, then taking a lump sum from your pension scheme will normally be taxable overseas, and not in the UK (but UK government pensions are almost always taxable in the UK). The tax treatment of the lump sum can vary considerably, with some countries offering attractive 'incentives' to woo new residents with low or zero tax rates, such as Portugal, Cyprus and Malta, whilst others have favourable tax legislation around pension lump sums, like France.
If you are thinking of retiring abroad and you need a pension lump sum to make this a reality, it is important you obtain the correct advice of the consequences of when the payment is made.
This article was written by Jason Porter of Blevins Franks International Tax & Wealth Management (blevinsfranks.com) and was first published in A Place in the Sun Magazine.
