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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I'm registered with HMRC as an overseas landlord (living and

Resolved Question:

I'm registered with HMRC as an overseas landlord (living and working in the South of Ireland since 2008) and submit self assessment returns each year. I'm due to receive an occupational DB pension next month paid into a UK bank. I know tax will be payable on the monthly pension, but will the lump sum - approximately £70K - still remain tax free?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

When you can start drawing benefits from your pension scheme, you may be able to take part or all of your pension benefits as a tax-free cash lump sum (called the pension commencement lump sum (PCLS)). If you’re a member of a defined benefit pension scheme, the scheme’s rules will determine how much you can receive as a PCLS. If you’re a member of a defined contribution (DC) pension scheme, you will normally have the option to take up to 25% of the value of your pension pot as a PCLS.

Either way, the lump sum cash payment would be tax free.

More information on defined benefit schemes can be found here

http://www.which.co.uk/money/retirement/guides/company-pensions-explained/defined-benefit-and-final-salary-pensions/

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.


Customer: replied 2 years ago.
What you have stated was already known. The focus of the question was whether the lump sum would still be tax free due to me no longer living in the UK but having the lump sum paid into a UK bank account. I am registered with HMRC and pay tax on profit from rental income from property
Expert:  taxadvisor.uk replied 2 years ago.
Steve, thank you for your reply.

Under UK tax regulations, the lump sum would be tax free. You do not have to be living in the UK to avail it.

You would have to check with Tax authorities in Ireland to to ascertain whether they regard lump sum payments tax free or you have to declare it on your tax return when filing the return in Ireland.. My guess is, that it would be regarded as tax free in Ireland too.

I hope this is helpful.
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Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes