Author Topic: UK pension withdrawal question  (Read 3031 times)

epipenguin

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UK pension withdrawal question
« on: April 23, 2015, 01:12:47 PM »
Hi all, I'm hoping someone out there can help me.

I'm a UK expat now living in the US. I have an old UK pension that is hanging out and seems to not be moveable at all (no QROPS or treaty with the US or something). Anyway, I understand that the rules on withdrawals have now changed and wanted to check my understanding.

So, first, I don't have to buy an annuity any more, right? I can take periodic lump sums at/after the age of 55. Also, 25% of my lump sum is UK tax free, and the remaining amount is taxed in the UK subject to whatever my UK income is. But the standard deduction is ₤10,600 this year, so let's say I was doing it this year, as long as I keep 75% of my total withdrawal below ₤10,600, I shouldn't have to pay any UK tax. So I could take out up to ₤14,133 per year - 25% of it would be tax free, and the other 75% = the standard deduction. Now, of course, when I move the money to the US it will be subject to US income tax, but that's fine as I can adjust my income accordingly to make sure I'm not going over any tax brackets I don't want to.

Then can I repeat every year until the money is gone? It'd be nice to deplete this account quickly so I don't have to file a damn FBAR form with the US IRS any more, and I'd rather not have to buy an annuity like under the old rules. I'd like to be able to use this to partially fund my ER from age 55 to age 59.5 when 401k withdrawals from my US accounts are allowed. [Well, technically I could withdraw from the 401k earlier but let's just assume I want to keep things simple.] Although it's a few years off, I like to be sure that my plan is somewhat logical. Right now the money would last approx. 5 years if I withdrew ₤14k a year, but by the time I am 55 it should have grown (although the standard allowance should grow too, I hope).

Any comments? Thanks in advance!

UnleashHell

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Re: UK pension withdrawal question
« Reply #1 on: April 24, 2015, 09:27:42 AM »
check again. I transferred and old pension from the pru into Merrill Lynch. I think I was the first one to do that back in 2006.. took forever but was doable. worth calling them and seeing.

epipenguin

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Re: UK pension withdrawal question
« Reply #2 on: April 24, 2015, 04:22:54 PM »
Oh, thanks. Every time I have looked into this it has seemed impossible. I will see what I can find out.

tetlee

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Re: UK pension withdrawal question
« Reply #3 on: December 07, 2015, 02:58:00 PM »
check again. I transferred and old pension from the pru into Merrill Lynch. I think I was the first one to do that back in 2006.. took forever but was doable. worth calling them and seeing.

Old thread I know...

Could you give some more details what was involved in this?
What kind of account did it end up in with Merrill Lynch?
Was there any tax implications for this?

Thanks

freezerburn

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Re: UK pension withdrawal question
« Reply #4 on: December 09, 2015, 08:25:42 PM »
Posting to follow. I have a small UK pension that I should probably move to the US, really unsure how.

UnleashHell

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Re: UK pension withdrawal question
« Reply #5 on: April 26, 2016, 05:05:27 PM »
OK - as I've been asked directly

I had a company pension in the UK. Due to the company failing I was able to move this to the PRU who ran the pension for my new UK company (this was back in the 90's). I moved to the States in 2000.

When they passed the law that meant Pensions could be moved abroad I contacted the pensions people in the UK. this was under the qrops scheme. I also contacted Merrill Lynch who were running my US 401k. I couldn't move it to the 401k but was able to set up an IRA and the UK pensions people accepted that as a qualified pension scheme. I know that it took months to achieve as nobody at pensions or ML had done it before. I no longer have the details as this was about 9 or 10 years ago.

not sure this will be much help but its all I have.

2lazy2retire

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Re: UK pension withdrawal question
« Reply #6 on: April 27, 2016, 09:31:01 AM »
http://www.ft.com/cms/s/0/defbbe5a-0e94-11e5-9ae0-00144feabdc0.html#axzz472bb85YX -


appears from this article it is not possible to transfer to US directly - advise is to leave in the UK and request under the treaty that withdrawals are taxed stateside only

UnleashHell

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tetlee

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Re: UK pension withdrawal question
« Reply #8 on: May 06, 2016, 01:39:58 PM »