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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3820
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I'm a New Zealand resident since 26 Sep 2012 with my family,

Customer Question

I'm a New Zealand resident since 26 Sep 2012 with my family, not yet permanent.
Had pension fund Sweden, transferred into a UK SIPP in 2012 before we moved.
Now I want to withdraw it all before 26 September 2016 if possible (because of NZ immigration tax law). I'm 58 years old. Never worked in the UK so no IRD number.
Was taxed for the entire amount in Sweden because of transfer to the UK. Is it possible to withdraw without paying UK tax?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. As you are over 55 you can liberate your entire pension pot. Of this 25% is tax free and the balance at your marginal rate of taxation. It is possible that under the Double Taxation Convention between the UK and Sweden that the tax deducted by Sweden on transfer may be allowable as a tax credit against the UK taxation levied on the 75% of your liberated pot. I do hope that my reply has bee of assistance.
Customer: replied 1 year ago.
Hi Keith,
Well not much. The reason I asked is to find out if it is possible or not. I know that 25% is tax fee and I know there is a double taxation agreement between Sweden and the UK / Sweden and NZ / NZ and UK. I want to get help with this.
Customer: replied 1 year ago.
The Swedish tax was not deducted on transfer. It was taxed the following year.
Expert:  bigduckontax replied 1 year ago.
But it was still deducted as a result of the transfer thus it could create a tax credit to offset the UK 75% liability on liberation. For the purpose of this position the Convention covers: 'the State income tax (statlig inkomstskatt), including sailors' tax (sjomansskatt) and coupon tax (kupongskatt);' As far as NZ is concerned see HMRC data at DT14200: 'The comprehensive agreement (SI 1984/365) entered into force on 16 March 1984 and has effectIn the United Kingdom fori) Income Tax from 1984-85,ii) Capital Gains Tax from 1984-85,iii) Corporation Tax from 1 April 1984,iv) Petroleum Revenue Tax from 1 January 1984.In New Zealand for any Income Tax year beginning on or after 1 April 1984.An amending agreement (SI 2004/1274) has effect from various dates, depending on the nature of the income or capital gain. Refer to the particular Articles, as amended, to determine the position.An amending protocol (SI 2008/1793), extending the Exchange of information Article and introducing an Assistance in the collection of taxes Article entered into force on 28 August 2008 and has effect from that date.'So the NZ Treaty may well cover you.'
Customer: replied 1 year ago.
Hi Keith -
Thank you. That's very useful. I'd like to talk to you on the phone next week if possible. Time difference is 11 hours. When would it suit you?
Expert:  bigduckontax replied 1 year ago.
Any day except Tuesday. I am on ***********
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your excellent support.
Customer: replied 1 year ago.
I will try to call you on Monday at 9am (your time). Cheers /Maria
Expert:  bigduckontax replied 1 year ago.
OK, Maria, I will try not to be out, bad time is between 1000 hrs and 1230 hrs when we usually go shopping.
Expert:  bigduckontax replied 1 year ago.
Maria, have you thought of transferring your pension from the UK scheme to a NZ one? Such transfers usually involve no UK tax exposure.
Expert:  bigduckontax replied 1 year ago.
If you are considering transfer you need a QROPS approved scheme. Unfortunately a large number of NZ insurers have suddenly dropped out of QROPS which probably reflects some legislative glitch rather than financial instability! In the meantime I will continue searching.
Customer: replied 1 year ago.
Hi Keith -
All I want is to get the money out, not transferred to another scheme.
I will try to find a financial advisor who can actually help me to do it.
Thanks for your help.
Expert:  bigduckontax replied 1 year ago.
Ok Maria, you know the tax consequences plus the liberation fees. I just thought that transferring under QROPS and then accessing in NZ might be the more efficient.

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