David Lee

Really? Why can't you just view it slightly differently and view the query in generic terms, about how a pension commencement excess lump sum is taxed? Does the tax on that lump sum need to be reclaimed in the UK or the country of residence?

Hi, I'm helping out a friend. He's British, living in the Czech Republic and has cashed in his UK pension, i.e. took a pension commencement excess lump sum. He got 25% of the pension tax free and then on the balance (c.£46k) around 30% of this was withheld by the pension provider and forwarded to HMRC. He wants to claim a lot of this tax back. I'm reading online that a lot of people claim the whole amount of tax back, based on the double treaty agreement, then would declare the income to the Czech tax people. It sounds like he would need to go and get some form stamped by the Czech authorities beforehand which might be a pain. Anyway, all things considered my friend would prefer it if it was possible to pay the income tax in the UK. So claim his personal allowance and pay 20% income tax on the rest. This would be simpler for him and I suppose better for HMRC. Is it possible to pick which route he goes down or is he forced to take a whole refund and declare the income in Czech Republic? If it's possible to just claim the partial tax refund in the UK, is there a one size fits all form to do this, as opposed to having to set up a Government Gateway account, register for Self Assessment online, etc?