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UK Expat Professionals Warned To Check Their Occupational Pensions LTA Limits
Published: | 16 Apr at 6 PM |
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British expat professionals in the UAE may be at risk of breaching pensions tax LTA limits.
Warnings are being sent out to the estimated quarter of a million expats living and working in Gulf states that their occupational pensions may be in breach of the UK taxman’s LTA limits. Those likely to be affected are in receipt of generous pension schemes such as are offered in the construction, oil and gas and aviation sectors, with those in the energy sector most at risk. According to upscale IFAs in the region, many in the oil and gas sector have already breached the tax-free limits, with some having done so by substantial amounts.
At the present time, British expats already in breach of the limits and who’ve not made any contributions since April 2016 can make an application to increase their LTA limit, with others in EU member states able to transfer pension funds to a QROPS as a way to avoid tax penalties. Those unsure of their exact positions should cease pension payments immediately as well as considering alternatives for pension transfers.
The LTA limit applies to the level of benefit able to be taken from a pension fund without incurring swingeing totals of tax penalties being applied. Funds involved are those drawn down by the investor as a lump sum or as an ongoing regular payment once retirement has kicked in. The current level stands at £1.05 million, but is likely to increase in line with inflation. Those considering moving their funds to a QROPS should take care when choosing an advisor, as past experiences suggests not all IFAs have their clients’ best interests at heart.
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