Don’t let taxes ruin your retirement abroad

Do you have to pay retirement tax when you move overseas?

The most tax-efficient places to retire abroad

Moving overseas in retirement is a path chosen by many looking for the next adventure in life. But should that mean you lose out on your pension by paying crazy taxes? Not necessarily. For UK expats and foreigners who have worked in the UK and built up a UK pension pot, finding a tax-friendly environment can often be the deciding factor when choosing an overseas retirement location. Here’s some key terms to consider when looking into tax requirements for moving your pension overseas.

How can you transfer your pension abroad?

A Qualifying Recognised Overseas Pension Scheme (QROPS) is a way to transfer your UK pension into a scheme that has been vetted by UK tax law and meets the qualifying criteria for transfer. In the UK, failing to transfer to a QROPS can mean a minimum of 40% tax on the money you transfer.

This is a popular choice for Silversurfers looking to retire abroad as they often mean less of a tax hit. You can seek to move to the location of your QROPS, but you don’t have to. Each pension case is unique so it’s best to consult a specialist before heading off.

Will I have to pay taxes twice if I move overseas?

It depends on where you choose to go. Double Taxation Agreements are tax treaties that exist between two countries to prevent double taxation of international individuals and businesses. In the case that a Double Taxation Agreement isn’t in place, you may end up paying tax twice if you’re considered a tax resident of two countries (the UK and the country you’re living in, for example). Choosing the right place to move for tax reasons means looking into whether that country has a taxation agreement, and how it will affect you and your circumstances.

Which countries are the best for tax-efficiency?

There are plenty of places for retirees to jet off to, but some notable places for their friendly environment include:

Australia: Australia doesn’t tax local pensions, but the receivable age for a pension in Australia is 60, instead of 55, which may mean you’ll have to wait before you can access your pension. Many of Australian QROPS have also been made ineligible since 2015, so you’ll need to check with the UK Government website prior to leaving.

Portugal: Portugal allows a 10-year exemption from taxes on your pension income if you’ve drawn your pension out in lump sums over that period.

Along with managing your pension, you’ll need to investigate other factors like the costs of living, visa requirements, and how to get the best exchange rates when transferring money overseas.

Using OFX to manage foreign money transfers means you can hold on to more of that hard-earned cash with lower exchange rate margins than the banks, and tools to help reduce the risk of currency fluctuations during volatility as a result of Brexit. OFX can help you lock in a rate today for payment later, or set a desired rate, and payment can then be made if that rate is reached. Silversurfers has partnered with OFX to serve all your global money transfer needs. Register here.

About OFX- Foreign Money Transfers Made Easy

With OFX, Silversurfers members can enjoy great rates, expert guidance and 24/7 customer support.


The contents of this article are for reference purposes only and do not constitute financial or legal advice. Independent financial or legal advice should be sought in relation to any specific matter. Articles are published by us without any knowledge or notice of the circumstances in which you or anyone else may use or rely on articles or any copy of the information, guidance or documents obtained from articles. We operate and publish articles without undertaking or accepting any duty of care or responsibility for articles or their contents, services or facilities. You undertake to rely on them entirely at your own risk, and without recourse to us. No assurance of the quality of articles is given or undertaken (whether as to the accuracy, completeness, fitness for any purpose, conformance to any description or sample, or otherwise), or as to the timeliness of the publication.
The following two tabs change content below.
Silversurfers has partnered with OFX, where the world's moving for easy global money transfers. Whether you're purchasing your dream property abroad, paying for a holiday, or sending money to family, with 20 years of experience you can trust OFX. We are authorised by the Financial Conduct Authority as an Electronic Money Institution.

Leave a Comment!

Not a member?

You need to be a member to interact with Silversurfers. Joining is free and simple to do. Click the button below to join today!

Click here if you have forgotten your password

Community Terms & Conditions

Content standards

These content standards apply to any and all material which you contribute to our site (contributions), and to any interactive services associated with it.

You must comply with the spirit of the following standards as well as the letter. The standards apply to each part of any contribution as well as to its whole.

Contributions must:

be accurate (where they state facts); be genuinely held (where they state opinions); and comply with applicable law in the UK and in any country from which they are posted.

Contributions must not:

contain any material which is defamatory of any person; or contain any material which is obscene, offensive, hateful or inflammatory; or promote sexually explicit material; or promote violence; promote discrimination based on race, sex, religion, nationality, disability, sexual orientation or age; or infringe any copyright, database right or trade mark of any other person; or be likely to deceive any person; or be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence; or promote any illegal activity; or be threatening, abuse or invade another’s privacy, or cause annoyance, inconvenience or needless anxiety; or be likely to harass, upset, embarrass, alarm or annoy any other person; or be used to impersonate any person, or to misrepresent your identity or affiliation with any person; or give the impression that they emanate from us, if this is not the case; or advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.

Nurturing a safe environment

Our Silversurfers community is designed to foster friendships, based on trust, honesty, integrity and loyalty and is underpinned by these values.

We don't tolerate swearing, and reserve the right to remove any posts which we feel may offend others... let's keep it friendly!