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Sam, Accountant
Category: Tax
Satisfied Customers: 14155
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am a self employed film maker, now in the UK. But most of

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I am a self employed film maker, now in the UK. But most of my working life I have been abroad. I only returned to UK last august after 3 years in Africa. I earn usually around 20 to 30,000 pounds a year - quite a bit of which comes from a property rental in Brazil (which I declare to Brazilian and UK tax). I have a Guernsey International Pension Plan - currently valued at 52,000 with Friends Provident International and want to cash it in to help pay of a mortgage in the UK for the house I am living in. I paid into the pension scheme, mostly in the 1990s when I was living abroad.
My question is what my UK tax liability will be on the Guernsey IPP and whether I am better to cash it in gradually over a number of years or all at once - to reduce tax liability?
Hi Tom
Thanks for your question
If you are under age 55 then all of the down draw is going to be liable to UK tax - if aged over 55 - then 25% lump sum can be taken tax free but if you draw anymore that this (over any period of time) then it will be liable to UK tax.
You are best leaving it until age 55 - and then just taking 25% tax free lump sum - allowing the rest to be paid as an annual pension.
IF the whole pension is trivial then there might be scope after age 55 to take the whole lot tax free - this is when your whole pension pot(s) amount to less than £30,000
Let me know if I can be of any furtehr assistance
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Customer: replied 2 years ago.

Thanks very much for that...I am 54 - so waiting until next year would make sense. Just a quick clarification. You mention that this is when your whole pension pot(s) amount to less than 30,000. Do you mean all the capital in the pensions...or annual pension income?


Hi Tom
Thanks for your response
It means the whole capital in the pension pot (pots if more than one pension) not just the annual pension