NEBA Private Clients successfully assisted a British expatriate, Mr. S, in navigating his retirement planning when he relocated to Dubai. Before the move, Mr. S had established a well-respected career, participating in effective pension schemes at the large companies where he was employed. Seeking a secure future, he decided to simplify his retirement arrangements by consolidating them into a single pension plan, eliminating the hassle of excessive paperwork and charges. At this stage, the value of his pension amounted to £450,000.
Upon settling in the UAE, Mr. S notified his pension provider of his new non-resident status in the UK, allowing him to discontinue any further contributions to his pension. After reaching the age of 55, Mr. S explored the most advantageous way to draw on his pension funds. By this time, he had resided outside the UK for over five tax years and qualified as of ‘pensionable age.’
During this period, Mr. S learned about the 2016 Double Tax Agreement (DTA) between the UAE and the UK, which enabled the taxation of pension income to be determined by the country of residence. As Mr. S was living in the UAE, where there is no income tax, this arrangement meant his pension could be withdrawn tax-free.
Moreover, due to the Pension Freedom rules implemented in 2015, Mr. S discovered he could withdraw any amount he wished from his retirement funds, which would typically be subject to taxation based on his marginal rate. However, in his case, the zero-income tax rate in the UAE meant he had no tax liability. NEBA Private Clients provided Mr. S with the guidance needed to make an informed decision, ultimately allowing him to withdraw the entire pension, now valued at £715,000, in a single payment without facing any tax consequences.
A condition did remain regarding inheritance tax (IHT). The capital would not be subject to IHT as long as it remained within the pension fund. However, if Mr. S passed away while the capital was outside the pension, it would be considered part of his estate. To address this, suitable solutions were implemented as part of NEBA’s comprehensive wealth management strategy.
For Mr. S, this outcome offered the ideal way to maximise the value of his life’s earnings. With the lump sum, he could clear outstanding mortgages, invest the remaining capital, and anticipate a vibrant and financially secure future.
NEBA Private Clients’ assistance exemplifies the possibilities of sound wealth management and proactive retirement planning, enabling expatriates like Mr. S to take full advantage of available opportunities and regulations.
TEAM plc (LON:TEAM) is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, the strategy is to build local businesses of scale around TEAM’s core skill of providing investment management services.
