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Sam
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Category: Tax
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I am married, 63, wife 60. We do not own a home, we rent. We

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I am married, 63, wife 60. We do not own a home, we rent. We have no jobs and are not entitled to State or company pensions because we have been living in New Zealand (where we have been paying tax on the interest on our savings, but are not entitled to any pension).
However, in the course of our lives, we have saved 1.3 million pounds from our employment. We try to live off the interest this creates from bank interest and share deposits.
If we come now to live in the UK, will we have to pay 55% on the money over one million pounds? In April 2016, the pension pot limit becomes one million pounds. Should we buy a house to reduce our savings to 900,000?
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
More information: We are not entitled to a State or company pension from any country. We are entirely self -financed. We worked all over the world and saved the 1.3 million pounds over decades. So, this money is 'savings' not a 'pension' in the strict sense. I am afraid that, if we decided to live in the UK, we would lose 55% of the amount over 1 million pounds. Our only source of income is bank interest and share dividends. The amount is small, about 12,000 pounds a year of income as some of the savings is in bank accounts which provide no interest. We like the flexibility of renting, but it occurs to me that, if we bought a house, we would have less than one million pounds left but somewhere permanent to live in. Very grateful for your advice. We are not able to work now, but cannot claim any benefits, and would not want to anyway.
Expert:  Sam replied 1 year ago.
Hi Thanks for your response This applies to pension savings (contributed into a pension scheme) only - and its due to the fact that 20% tax relief would have been added in along with the contributions - and that's why restrictions are placed on its size. Your money has just been saved - and has not had any tax relief on it, so will not be subject to any tax charges - just any interest or income (such as dividends) that arise from these investments. Currently income of less than £10,600 remains tax free - and you advise that your income amounts to £12,000 a year (you do not indicate if this is each or between you) but you can see - that if each - then only £1400 of said income would be liable to tax at 20% less any tax suffered (10% rate on dividends and 20% on interest) so you may find there is no tax liability. Once you arrive in the UK - you should arrange to contact HMRC to set each of you up in self assessment - so each year you can declare this investment income Link here for you to do thishttps://online.hmrc.gov.uk/shortforms/form/SA1 So that after each 5th April (end of UK tax year) you can advise HMRC of your income position. But there is no need for you to purchase property unless you wished to If you plan to transfer any of this money into the UK - then just make sure your bank knows, as they now have to carry out security checks on larger amounts. Let me know if I can assist further Thanks Sam
Customer: replied 1 year ago.
Excellent, clear response. Thank you very much. Now I understand!
Expert:  Sam replied 1 year ago.
Wonderful - and you can continue with your plans knowing you will not suffer excess tax on you hard earned savings! Do let me know if I can assist further but it would be appreciated if you could rate me for the level of service I have provided (or click accept) Thanks Sam
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Customer: replied 1 year ago.
Thank you, ***** ***** was impressed with your answer.
Very best wishes,
James
Expert:  Sam replied 1 year ago.
Hi James You are very welcome Thanks Sam

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