If you previously lived in the UK and had a UK workplace or personal pension fund, you may wish to start withdrawing money from these funds. As a non-UK resident, you should generally not be paying UK tax on this income but rather paying tax in your country of residence.
However, the UK will only exempt an individual from tax if they are a resident in a country that has a double tax treaty with the UK.
You can check whether your country has a double tax treaty with the UK using the following link:
đź”— UK Government Tax Treaties Collection
What Should You Do?
- Confirm your tax residency under UK rules (Statutory Residence Test) to ensure you are not considered a UK resident.
- Claim treaty relief with HMRC if applicable.
- Consider professional tax advice if you have significant UK income or concerns about dual residency.
⚠️ UK State Pension generally remains taxable in the UK, regardless of residency.
Countries Without a Double Tax Treaty
If your country does NOT have a double tax treaty with the UK, your pension provider will likely deduct UK tax at source.
However, you may still be able to reclaim UK tax paid if your total UK income is below the UK personal allowance (ÂŁ12,570 for 2024/25).
Qualifying Recognised Overseas Pension Scheme (QROPS)
If you permanently live abroad, you might consider transferring your pension to a QROPS (Qualifying Recognised Overseas Pension Scheme), which meets UK regulations.
This may help reduce or eliminate UK tax on withdrawals. However, it is important to check transfer fees and the tax rules in your new country before making a decision.
