Tax on foreign pension lump sum for UK resident

I am a UK national and I worked abroad in Romania, The Netherlands and Denmark from 2000 until 2015. In 2015 I returned to live in the UK permanently. My international employer enrolled me in their contributory retirement savings plan in July 2001 - 2015. I paid in country taxes on my salary before my contributions were made. Since 2015 my employer transferred the frozen pot to sit in trust in the Isle of Man ( I had no say where they put it) - until I leave the company. I am now coming up to planning for my retirement and I am finding it very hard to get any advice on how this lump sum is to be reported and tax calculated assuming that I remain as a UK resident. My (US) employer simply repeats that it is a non UK Retirement savings plan. I understand that the regulations changed recently regarding lump sums, but I have also read that as contributions were made before 2017 other rules may apply. Can you point me in the right HMRC guidance please

Hi,

As the pension pot is held in the Isle of Man, we need to review the double taxation agreement with the UK and the Isle of Man. 

Isle of Man: tax treaties

Article 17 covers pensions and advises that pensions and lump sums paid to a resident of the UK, shall only be taxable in the UK. You will need to submit a request for a certificate of residence.

How to apply for a certificate of residence to claim tax relief abroad

You will need to include details of the pension lump sum, including a gross amount. HMRC will send you a certificate of residence, which you should send to the Isle of Man tax authorites, to claim repayment of any tax deducted from the lump sum.

Thank you.

Hello I have a private pension in Luxembourg held with AXA. If I transfer this as a lump sum to the UK as tax resident in the UK would there be any tax payable in the UK? Thanks

Hi D Mend,
Article XVIII advises that pensions and other similar remunerations of a resident in the UK, in consideration of past employment in Luxembourg, shall be taxable only in the UK.
Please see guidance here: 
Luxembourg: tax treaties
Thank you. 

Hi, I am in a similar position to the above individual,contributing to an International Pension plan with Royal Life(now Friends Provident International in Isle of Man)from 1988 to 1997,whilst living and working in Germany.I returned to the UK in 1997,at which time I stopped contributing and the pension ,which is still in the Isle of Man is frozen. I am now approaching retirement and would like to surrender the policy,which has a value of about £10,000 and take it as a lump sum. I have been a UK resident since 1997 and it is my understanding that if it was surrendered,I would be liable to pay tax in the UK only.My enquiry is how would I proceed in order to do this?On asking Friends Provident,they suggested that a Chargeable Event Certificate could be issued within 3 months of the policy surrender,which I should forward to HMRC.However should this be done together with a completed Self Assessment Tax Form? I wish to follow the correct process and pay whatever tax is due,so any advice would be very appreciated. The amount of this policy would be my only income for the next tax year 2024/25 Kind regards.

Hi,

If you are already in Self Assessment, you will include the pension in your return.

Thank you.

Hi, I am not currently registered for Self Assessment,so would I need to register first ?

Hi, I suppose a more accurate question is; Is Self Assessment the only correct method with which to declare this type of income? Thank you.

Hi,

As this is a foreign policy, you meet the criteria for completing a self assessment tax return when the policy matures.  

You can register for self assessment at:

Check how to register for Self Assessment

Thank you.

Hi Andy33BM,
Yes as foreign income is Self Assessment criteria.
Thank you. 

I have a pension pot in Singapore, where I worked for many years. When I withdraw (either the the entire fund or partial amounts), the Singapore government taxes the withdrawal. Would it also be taxed in the UK?

Hi,
Please refer to the following guidance:- Tax on foreign income
Thank you.