Pension lump sum claim from the UK?
Nov 15th 2021, 3:09 am
#1
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Pension lump sum claim from the UK?
Hi, I have a small pension from Mark's and Spencer that is available to claim. Has anyone any ideas what is the best way to get it to New Zealand? I do not want to put it into a pension here, just claim the money but I am having difficulty finding out how much tax I would have to pay and how to get it. Thanks
Nov 15th 2021, 8:03 am
#2
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Re: Pension lump sum claim from the UK?
Originally Posted by dianneteacher
Hi, I have a small pension from Mark's and Spencer that is available to claim. Has anyone any ideas what is the best way to get it to New Zealand? I do not want to put it into a pension here, just claim the money but I am having difficulty finding out how much tax I would have to pay and how to get it. Thanks
I did the same as you want a few years ago. Cashed in a some old UK private pensions to access the cash rather than re invest in nz
Nov 28th 2021, 11:23 pm
#3
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Re: Pension lump sum claim from the UK?
The NZ Income Tax Act applies, meaning you will need to declare the full payment in your tax return and pay tax at your personal income tax rate. For example, if your annual income is $70,000 per year, plus the amount you receive from your pension payment (for example purposes, lets say your pension payment is $20,000 NZD), then you will pay tax of 33% on the $20,000 pension payment. i.e tax of $6,600 NZD. (This is an example only, you should seek tax advice).
To get the funds out, you need to follow the instructions from the UK pension company. Note, the UK pension company may also withhold UK tax unless you have a NT Tax Code.
If your scheme is a Defined Benefit plan, then there are other factors that come into play.
Best wishes.
To get the funds out, you need to follow the instructions from the UK pension company. Note, the UK pension company may also withhold UK tax unless you have a NT Tax Code.
If your scheme is a Defined Benefit plan, then there are other factors that come into play.
Best wishes.
Last edited by chc4me; Nov 28th 2021 at 11:25 pm.
Nov 30th 2021, 8:31 pm
#5
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Re: Pension lump sum claim from the UK?
LittleGreyCat In the context of the original post (OP), Transitional Tax Resident Exemption would be required. There is some criteria to qualify as for the Transitional Tax Resident Exemption, including first time in NZ (new immigrants) or returning to NZ after 10 years away, and not to have previously used this exemption.
The OP said they wanted to 'just claim the money". This would be considered a pension income payment and therefore taxed as Income in NZ. If the person qualifies for the 4 years tax free exemption, then no tax would be payable. However, just 1 day over the exemption would result in the full amount assessed for income tax.
Pensions are confusing, tax even more so. Seek advice from an expert to avoid surprises.
The OP said they wanted to 'just claim the money". This would be considered a pension income payment and therefore taxed as Income in NZ. If the person qualifies for the 4 years tax free exemption, then no tax would be payable. However, just 1 day over the exemption would result in the full amount assessed for income tax.
Pensions are confusing, tax even more so. Seek advice from an expert to avoid surprises.
