Too good to be true, perhaps?

[Fred Bloggs]

I have always avoided working outside the UK due to the uncertainty and taxes levied when abroad. The lack of any UK work has rekindled my interest and I have discovered section 615 retirement benefit plans. In a nutshell, it seems to me that you can be seconded by YourCo abroad and pay unlimited funds from the company into the section 615 plan which qualifies for corporation tax relief. When you come home, it appears you can draw the benefit from the section 615 plan as a lump sum free of tax if you're over 55. What could possibly go wrong? Any one heard of this?

[john@UKCA]

Don't you have to be non UK resident when the lump sum retirement benefit is paid?

Have you checked all this out with your IFA?

[Fred Bloggs]

Not as far as I'm aware of, but I have only just come across it. I'm looking to see if anyone here has come across thisor has used it.

I think the average IFA won't have the knowledge about this, but I'm going tofind out. There are plenty of section 615 "experts" on the web but whether they are any good is another question entirely.

[john@UKCA]

I assume you have no problem becoming non UK resident?

From what I have read it seems that provided the contributions and benefits accrue whilst you are non UK resident then the cash lump sum taken at 55 or over is tax free in the UK.

Care must be taken to ensure that the Scheme is not caught as disguised remuneration abuse.

[Fred Bloggs]

Thanks. As I read it, I would be both UK and foreign resident as I receive an occupational pension that is paid and taxed in the UK. Your understanding of drawing benefitstax free in the UK is how I understand it. Regarding disguised remuneration, I understand each plan has to be given the nod by HMRC so would be unlikely to be challenged. Thanks for the suggestions. It seems nobody else has looked at this but it seems potentially very attractive.

[BlasterBates]

If you're working abroad you have to worry about the tax authorities in the country you're working. That alone will probably "torpedo" this idea.

[DaveB]

As I understand it you have to be tax resident, paying income tax and social security, in the foreign country in order to qualify. Depending on the country you might actually be worse off.

[Fred Bloggs]

If you're working abroad you have to worry about the tax authorities in the country you're working. That alone will probably "torpedo" this idea.

Thanks, but it's specifically designed for companies who second staff abroad? I read that the fact that each plan is vetted by HMRC means that tax authorities abroad recognise it as a legitimate pension plan for the purpose of tax.

[Fred Bloggs]

As I understand it you have to be tax resident, paying income tax and social security, in the foreign country in order to qualify. Depending on the country you might actually be worse off.

Yes, but the salary in the location abroad would be only what you need to live off. The balance would be paid into your section 615 plan here in the UK ready to draw on when you came home.

[SueEllen]

Thanks, but it's specifically designed for companies who second staff abroad? I read that the fact that each plan is vetted by HMRC means that tax authorities abroad recognise it as a legitimate pension plan for the purpose of tax.

Don't presume what's accepted by HMRC is accepted by other tax authorities regardless of what the scheme provider says. You are going to have to target one or two countries then find out about their specific tax laws.

Also lots of EU/EEA countries do not accept small limited UK companies with one/two directors and no other employees as a valid company set up so you won't be able to second that employee.