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Sam, Accountant
Category: Tax
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I am a 63yo retired woman living on my own. I came to NZ for

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I am a 63yo retired woman living on my own. I came to NZ for a hospital job in 2006. I was back in the UK from NZ Feb 2012 - Sept 2013 to pack and finalise my move to NZ permanently. From March 2012 to departure I was under constant medical treatment for completely debilitating full right side sciatica following an accident.
When I returned to NZ I rather stupidly fell off a ladder due to weakness on the right side, my leg gave way, in Dec 2013 and dislocated my shoulder/bone fracture/ripped rotator cuff/query concussion. After 5 months of constant analgesia and 2 hrs sleep/night, at a very low ebb emotionally and cognitively I released my UK private pension which had been transferred to a QROPS fund here in 2007.
I realised 4 days before it was released what I had done and emailed the company to stop payment but they did not respond and proceeded.
HMRC Appeals office have confirmed they are taxing 55% of my entire pension fund I need to live on. I will have to sell my house. They cite the first letter I sent September 2014 but not the second of a couple weeks later with evidence attached of a UK GP letter dated March 2012, a list of all appointments, a letter from a therapist and a letter from my GP here citing my reduced ability to make clear decisions at the time of fund closure.
An HMRC employee in September told me to give the history and cite "Exceptional Circumstances:Medical Emergency" for overstaying the six months in the UK - resetting my five years in NZ to zero and reinstating UK residency. I was so far gone at the time of fund release in 2014 that I could not form sentences with friends, much less appreciate action and outcome. It's a nightmare.
***** *****
Thanks for your post, and I am so sorry to hear of all that you have been through.
However please could you advise
1) Did you retain property in the UK whilst working abroad (2006 to Feb 2012)
2) You advise that you returned to the UK in Feb 2012 but did not leave again until Sept 2013, but that from March 2012 you were under constant medical treatment. Can I ask when did the accident happen and what sort of medical treatment were you undergoing during this time. Had your employment ceased in NZ? Or did they keep your job open? On what basis where you to settle in NZ permanently.
What made you come back to the UK in Feb 2012.
Was Sept 2013 due to see the end of any treatment plan at that time, and did this affect the plan to move to NZ permanently?
3) You advise that "An HMRC employee in September told me to give the history and cite "Exceptional Circumstances:Medical Emergency" for overstaying the six months in the UK - resetting my five years in NZ to zero and reinstating UK residency"
For what period of time does this relate to? As so far I do not see any period of time that would have been any different to the time you did spend in the UK
Finally can I ask what you are needing from this post - (so what help are you seeking, as you have not stated what assistance you require)
Customer: replied 3 years ago.

1. I had my home in the UK, I sold it while there.

2. A bus hit our bus in India Jan 2012 while I was being a tourist en route to the UK. From seeing the UK GP the sciatic pain worsened substantially throughout 2012 so that I had to move about the house from furniture to furniture for support and go up stairs on hands & knees. I had private osteopathy appts, one with a musculoskeletal consultant, twice weekly acupuncture for a year, and via the NHS - imaging, physiotherapy appts, steroid injection (only 1 as effect lasted only 3 days so they wouldn't do more).

I left NZ employment to travel back to the UK, make arrangements and return to retirement; I have permanent residency here.

There was no end to the treatment plan, the sciatica is still a very limiting and painful issue - I have weekly chiropractor appts and am still waiting for a private appt with another musculoskeletal consultant for likely surgery.

3. I was in the UK for the extended period of Feb 2012-Sept 2013 solely because of the extreme pain of the sciatica. I had planned to sell, pack, be back in NZ within a few months but could not get done what I had to in order to leave. I finally had no recourse but to get on with it and arrange continuing medical appts on arrival here.

I need to know what more I can do. I'm not certain HMRC connected my follow-on letter to them with the medical letters attached once I had received them to send. He has quoted rules RPSM09104610 and 660 which I will today access - but find little of HMRC docs make sense to me. I overstayed in the UK due to medical necessity not choice. I closed the QROPS fund in a circumstance of severely reduced mental capacity due to longterm analgesia and severe pain. Surely there is some humanity, some space for these realities impacting?!

If it all comes to the worst outcome - what is the 55% taxed on? In the 1990s I invested a total of £54,521 from a company plan transfer plus payments. I was Oncology Clinical Trials Mgr for a pharmaceutical company. In the mid-90s I retrained as a Counsellor to actually do some good and have made very basic pay ever since. My fund on closure was about NZ$250,000. It was asset-stripped and annually taxed there and here the last five years so that it barely tripled in 25 years. To pay 55% now is a final insult to my attempt to care for my own old age. And does the 55% take into account that the investment capital was £54.5k and the little more is all already taxed interest?

Hi Pat
Thanks for your response and the additional information.
I am so sorry, but I do need to ask a few more questions as I am trying to establish two considerations
1) Whether this even falls into UK consideration and
2) If it does, whether there are grounds for any leeway, and argument of the extended stay in the UK (which I fear is not the case)
However, you have now added more information to the timeline, which changes the initial thought process further
I need to try and establish a complete timeline from 2006 to current date to incorporate movement in and out of the UK and movement in and out of NZ and movement in and out of any other country (as you now advise that the accident occurred in India in Jan 2012 as a tourist - and that you were en route to the UK at the time)
SO perhaps you can build me a complete picture from the date the job ceased in NZ (with the date) to the date you went back to NZ (Sept 2013) and also advise whether you have left NZ at all since Sept 2013 and to where and for how long.
Also where did you stay whilst in the UK if your own property had already been sold whilst in NZ. But you also then state you had planned to sell during the period Feb 2012 to Sept 2013
Did you own property in NZ during this time - did you declare the capital gain sale of the UK property to HMRC
Can you also advise the exact date that you instructed the fund to release the full pension position.
Its 10.41pm here in the UK and I have a 5am start - so may not get to fully respond to you, until 5.30am UK time - but I will respond then (if that's agreeable)
Customer: replied 3 years ago.

I will gather info and come back to this page.

In part response - I have not been out of NZ since arriving in Sept 2013 via airport wheelchair transfers, the sciatica is such that I am virtually housebound.

Hi Pat
Thanks for the initial response, I look forward to a full listing of your movements
Customer: replied 3 years ago.

Hi Sam,

I am now on my own but of course very late there, I had promised to cook dinner for neighbours and they just left.

Here is a timeline I created some months ago to attempt in my analgesia-induced numbed state to make sense of things. Bot***** *****ne - I suppose I just can't believe that because I have always paid my dues, always played straight and done the right thing, I am in this position of my future being completely compromised by an action when I made when incompetent through constant pain, lack of sleep for months and strong analgesia.

Here is the timeline I gave myself trying to make sense -


September-January 2012 - Cambodia, Laos, India on way back to UK

India - bus hit our bus = spinal damage, within week - children in orphanage while trying to help pulled me from seat on pile of concrete blocks so I fell several feet onto blocks to avoid little ones below me.


February 1 – back in UK; accessed medical care

March 2012 through September 2013 – right side sciatica; on hands and knees, housebound, months of treatment - osteopath/ acupuncture/ physiotherapy


could prepare and sell Chichester home and return to NZ

appalling stress due to lack of income

September 18 – final departure UK for NZ

November – bought house NZ, found plumbing and wiring inadequate, rainwater tank for house supply polluted, septic tank soak field ruptured

December 23 – fell from ladder

Shoulder dislocation, fracture, rotator cuff torn, ligament damage


Jan – steady supply GP analgesia prescriptions – 3-4 hourly

Feb 20 – x-rays/ultrasound of shoulder - fracture, torn rotator cuff, ball joint ‘rubble’

Feb 27 – GP more pain meds

Feb – neighbour putting in illegal campground right outside my living room window, battles, Council meeting

March 12 - Perry Turner, Orthopaedic Surgeon

March 20 - MRI of shoulder injuries

April 9 – Perry Turner, Orthopaedic Surgeon

April 9 – GP more pain meds

April – May – Osteopath, Acupuncture, Physiotherapy appts 2-3/week

May 20 – 2 large amalgam fillings replaced

May 23 – GMI withdrawal form sent to me to close fund

June 12 – brain starting to work off meds, worried, email to GMI to pause pay out – no response;

June 16 – fund closed and pension in ASB account

July HMRC confirmed I must pay 55% tax on the whole of pension fund – approx. $146,000.00 – which has already been taxed!!

8 – Perry Turner, Orthopaedic Surgeon - off surgery list


Sleep in 1 ½-2 hour snatches cushioned upright against headboard, generally approx. 3-4 hours sleep/night

Tearful, exhausted, cognitive abilities terrible, evidence of memory and language skills badly eroded; logic frequently failed – costly mistakes re work on the house

Frequent desire to harm self to stop the pain and distress


Was I concussed in the fall? No one with me, lay on the ground 50 mins, no idea if I had been unconscious.

Frequency of analgesics + sleep deprivation + constant pain – could my decision-making have been affected to the extent of a case in legal terms re releasing pension fund?

When re-collecting myself early/mid-June I knew I couldn’t release my pension yet as I had been in the UK, detained with sciatica longer than should have been there.

Feel I had misdirected myself by a terrible fear during the acute pain to make safe/be secure.

NOW discover that NZ IRD will tax me on the June withdrawal!! Ruling came into force from April 2014. How was I to be aware? Why did GMI not make me aware of this change when I applied for the withdrawal in May?


Additionally, I had finished at Dunedin hospital (part-time placement) and then completed my tutor placement in the Dunedin Medical School September 2011 and travelled back to the UK via Cambodia, Laos and then 2 months in India as a volunteer on two projects in the villages outside Bangalore and an orphanage in Mysore.

While I was in the UK I was offered by a kind friend the possibility of sitting on a boat with only a few metres and three steps to hobble between from mid-June to end August while he took it down through France en route, stage one, to the Med.

I also left the UK for 3 weeks in September 2012 (I think) for NZ as I had an around world ticket and it expired then, I had extended it twice as I expected to use it much earlier. Stayed with friend in Dunedin NZ, wheelchair airport transfers, continued with acupuncture locally in Dunedin, returned to UK to complete what needed to be done to emigrate.

My house had not been sold while I was in NZ, it was sold while I was in the UK, September 2013, because I could not prepare it earlier for sale, I could hardly move. I've never experienced anything like it in my life, at least birthing was quicker!

I stayed in my own home in Chichester while in the UK. In NZ I rented accommodation, 5 in 5 years as they put the properties on the rising market as soon as my furniture was in place.

I feel certain I am sending this too late today for any response, the joys of a shrinking world.

Hi Pat
Thank you so much for the comprehensive timeline
Just one final question
The fact you have already been taxed on this pension (only first 25% can be paid tax free and the rest will be liable to tax) in NZ, then HMRC will in fact give you credit for the tax suffered,
HOWEVER as you left the UK again 18/09/2013 to settle permanently in NZ, and this was paid out the following tax year, there should not even be a UK tax consideration as
1) You were not UK resident for the a last 4 out of 7 years (but only 2 out of the last 7 years)
2)You will not (as things stand) be returning to the UK to become UK resident
3)There will appear to be, fewer than 5 tax years between the later year of departure and the future year of return.
So this means you have NO further tax liability in the UK, just the NZ position to consider, which has fully been addressed.
So you should provide this simple timeline to HMRC
1) Left UK 2006 to take up work in NZ
2) Sept 2011 to Jan 2012 Travelled round India and had serious accident
3) 01/02/2012 returned to the UK to undergo various medical treatment and stayed until 18/09/2013 - just 3 weeks out of the UK during this period back to NZ in Sept 2012
4) Finally left the UK 18/09/2013 back to NZ and UK property sold
5) Quorps pension cashed in inadvertently 16/06/2014 - tried to reverse the request unsuccessfully - tax suffered prior to payment of funds in NZ
But you have no tax recourse on this matter I am very sorry to say, whether you have legal recourse due to the fact that the pension fund failed to carry out your withdrawal of request (as there must in law be a cooling off period in place) so its the legal stance I feel you may have some argument against the pension fund on.
let me know if I can be of any further assistance
Customer: replied 3 years ago.

Hi Sam, Your stamina is wonderful, I am very impressed.

I'm rather confused as you offer two opposing statements above -

"… there should not even be a UK tax consideration as…" and then at the end "But you have no tax recourse on this matter I am very sorry to say…"

unless the first applies to the UK, the second to NZ tax liabilities. But the UK Appeals office has all this timeline info and stated in the brief letter received Saturday that the 55% tax does stand. An HMRC chap in an hour long telephone discussion last Sept told me categorically that the proof of exceptional circumstances: medical emergency that kept me more than 6 months in the UK 2012/13 was the only way by which the residency clock was not reset to zero. He assured me this would remove the tax liability. I sent those medical letters but received no acknowledgement that the Appeals office had even considered them. All conflicting statements.

When I say tax has been paid, I refer to tax paid on interest at source (post-Gor***** *****) for the 25 year period - the last 5 years here - of pension funds investment during which £54.5k became an appalling approx £150k pension pot.

This tax takes me to a point I needn't have bothered investing in mature hope 25 years ago, encouraged by the govt. Very shabby dealings have occurred with 'my' money while not in my control, but not by me.

So assuming I am being taken into penury by this one brief action during a bad period, does HMRC allow staged payments over, say, five years? It's in a bank savings account that loses 5 months interest if I take it out now. Would it be due right now as we speak and I'm about to accrue daily interest?

My last request


Hi Pat
Thanks for your response, and the compliment!
I do apologise - my statement should read, whilst there is a tax consequence in NZ - as this is your country of residence when this payment had arisen - there will not ALSO be a tax consequence in the UK as you are not UK resident at the time this payment is made (sometimes a tax consequence arises in two countries, at which point the tax suffered on one is allowed against the tax position arising on the other)
However you state that HMRC are pursuing the tax position, at 55% tax which suggests that this was NOT a recognised overseas pension scheme, you were however NOT UK resident either
1) at the time of making he transfer into this overseas QROPS nor
2) Resident in the UK when this paid out (although its fair to say that some of the contributions made into the original pension pot, were made when a resident in the UK and working in the UK.
But I do think there may be some scope to have this looked at - but I am not a pension/QROPS expert (and none of us are, on Just Answer)
But I think you need to write back to HMRC and ask them
1) to detail why the charge arises
2) And why they have not fully dealt with your extended stay within the UK being due to medical grounds (though I am not entirely sure this ties in at all!)
Ask for a full explanation in writing, and then perhaps come back to Just Answer or see if you can engage a QROPS pension expert there in NZ - to guide you through this minefield -
But do not if you do have to pay anything back then yes they will accept a payment plan (you have no assets they can take in the UK so they are going to have to accept what you can afford!) If this can be done within 3 years, all the better, but if you need this to stretch over 5 years then be firm in that offer and its affordability.
Let me know if you need anything else
Thanks Pat
Sam and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Thank you so much Sam, I'm very, very grateful for some clarity. It's an absolute minefield for people just trying to get on with their own areas of work expertise. A great deal is expected of us in terms of awareness and knowledge - rather more than is reasonable I think.

Thank you again for sticking with my question so long,


Hi Pat
You are very welcome and I agree its a nightmare at times !
Let me know if I can be of any further assistance. In the meantime it would be appreciated if you could rate the level of service I have provided (or click accept) as this ensures Just Answer credit me for my time
Customer: replied 3 years ago.

Hi Sam,

I did rate 'Excellent'.

Hi pat
Thank you so much and take good care of yourself