Expat Life Spain » Retirement http://expatlifespain.com A Female View On The Expat Life Mon, 23 Jan 2012 17:52:16 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Tax breaks for offshore pensions http://expatlifespain.com/tax-breaks-for-offshore-pensions http://expatlifespain.com/tax-breaks-for-offshore-pensions#comments Wed, 10 Feb 2010 12:35:25 +0000 Expat Life http://expatlifespain.com/?p=3552

Many expats living in Spain moved out to enjoy their retirement in the sun, relaxing and enjoying their hard earned pensions. I suspect that for many the concept of a offshore account never really occurred to them, perceiving it to be something for the rich or dodgy.

However a growing number of British expats in Spain are moving their pensions offshore after reform in 2006 allowed long-term expatriates to set up the Qualifying Registered Overseas Pension Scheme (QROPS).

A key attraction of QROPs is that there is no obligation to buy an annuity, although contributions do not enjoy UK tax relief where the taxpayer is resident outside Britain.

In certain circumstances British expats can borrow from their QROP pension pot, a useful facility when credit is in short supply.

If a pension is received from a UK source, then it is generally liable to UK income tax. However, in many cases, that income can be exempted from UK tax entirely if the pensioner lives in a country which has a double taxation agreement with the UK.

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