Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Fri, 19 Jan 2024 15:14:09 GMT by
I am a UK resident and my age is 42 1. I worked in India till August 2017, having an accumulated pension fund (Employees' Provident Fund Organization (EPFO)) of £24K as on 31/03/2017. During the period from April 2017 to August 2017 additional contribution of £2K is added to fund by employer & employee. 2. From 2017 till October 2022, interest is accumulated in the fund and the total fund balance is £36K. 3. I withdrew all lumpsum amount of entire £36K in Oct’22. 4. The Employees' Provident Fund Organisation (EPFO) is one of the two main social security organization under the Government of India's Ministry of Labour and Employment and is responsible for regulation and management of provident funds in India, the other being Employees' State Insurance. It is accessible to all the employees in India. 5. I employed in UK since 2017, and accumulated around £50K in my UK pension account. Queries: 1. Is the Lumpsum withdrawal is taxable in UK? If yes, what is the total taxable income? 2. If yes, Can i take the advantage of 25% of lifetime allowance exemption? 3. If i utilise the 25% exemption limit, can i still use the full annual pension allowance (or) the reduced allowance of £10K is applicable going forward? 4. Should we declare this income as a Pension income (or) interest income, as majority of the fund value accumulated since 2017 is through interest.
Posted Wed, 14 Feb 2024 17:56:39 GMT by HMRC Admin 25
Hi Venkatasatish,
There are a number of factors that would need to be taken into account for a definitve answer on this.
Please refer to Overseas pension schemes can take many forms and structures and we are unable to provide generic advice as to whether an employer contribution is taxable as employment income or not.   
Where an employer makes employer pension contributions there are a number of tax provisions that can apply to exempt those contributions being treated as employment income for the individual:
S307 ITEPA 2003 - provision made by an employee's employer under a registered pension scheme or otherwise for a retirement or death benefit EIM21800 - Benefits: pension provisions refers. 
S308 ITEPA 2003 - contributions under a registered pension scheme:
EIM01570 - Employment income: Registered pension schemes: employer's contributions
S308A ITEPA 2003 - contributions under a qualifying overseas pension scheme where additional conditions are met:
EIM01570 - Employment income: Registered pension schemes: employer's contributions 
Employer contributions can also fall within Part 7a where there are third party arrangements:
EIM45000 - Employment income provided through third parties: overview, general approach: contents                                                                                                                                                                                                                                                                                                             
If you still unsure you will need to contact us direct on 0300 200 3310 or speak to a financial adviser.
Thank you. 


You must be signed in to post in this forum.