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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Hello. I am almost 55 and considering taking early retirement.

Resolved Question:

Hello. I am almost 55 and considering taking early retirement. I currently reside in the UK, but also have a holiday home in Portugal.
I was recently informed by my Portugese neighbour, who was French, that I could potentially, change my permanent residency to Portugal and in doing so could avoid paying any tax on my UK private pension??
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

If you become non resident in the UK for tax purposes, you could ask HMRC to issue you with a NT tax code meaning no tax is deducted from your private pension by the pension provider.

You will be paid your pension gross and you would pay tax on it in Portugal.

More information on this can be found here- look at Q4

http://www.hmrc.gov.uk/cnr/rac-faqs-non-res.htm

I hope this is helpful and answers your question.


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Customer: replied 3 years ago.
Thankyou for the reply. So, if I understand correctly, as the is a Double Tax Treaty in place between the UK and Portugal, I may be able to get Tax Exemption in the UK, chosing instead to pay tax in Portugal, where it is currently zero, for retiring residents??
Expert:  taxadvisor.uk replied 3 years ago.
Stephen, thank you for your reply.

Under the DTA between the two countries, you will be able to draw your private pension gross in Portugal and it would become chargeable to income tax in that country.

I hope this is helpful.

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