QROPS in Angola

    Should you transfer your UK pension?

    Are you an expat living in Angola? Have you got a UK pension? Here are your options for the tax-efficient management of your pension.

    If your pension remains in the UK, you may have UK tax obligations. 

    You could do better if you transfer your pension funds out of the UK.

    Such a transfer into a Qualifying Recognised Overseas Pension Scheme (QROPS) requires qualified advice.

    Here's an overview of your options...but if you have specific questions, don't hesitate to contact us and we'll help.

    Leave in UK

    If you leave your pension in the UK

    From 6th April 2006, the rules for UK pension schemes including; retirement annuity contracts, small self-administered schemes, self-invested pension plans, personal pensions and occupational schemes; have been consolidated under ‘Registered Pension Schemes’. 

    These come under either Defined Benefit or Defined Contribution Schemes.

    UK tax

    Income Tax (UK) during the member’s lifetime

    More flexibility was offered to pension holders in April 2015 meaning that in most cases, 25% of pension pots can be withdrawn tax free whilst the remainder (no matter drawdown, lump sum or annuity income) is taxed at the pension holder’s marginal rate of up to 45%.

    If income is sourced in the UK, than non-UK residents are liable to pay UK income tax on those earnings as is the case for earnings of UK residents. If you have a pension in the UK, this is counted as UK source income and so you are taxed at your marginal rate on the 75% that is not included in your tax free sum.

    However, a Double Tax Agreement (DTA) between the country in which you are resident and the UK can mean that you are exempt from UK tax – choosing instead to pay tax where you are resident.

    DTA

    DTA between the UK and Angola

    Angola has not concluded any double tax agreements (DTAs).

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    Death payment

    Pension Death Benefits Payment – UK Tax

    Legislation in April 2015 affects UK taxation on defined contribution scheme benefits. For instance, taxes on benefits are now influenced by whether the pension scheme member passes away before or after reaching 75 years of age. Passing pensions onto beneficiaries is now, in general, less costly. Marginal tax rates are still up to 45%.

    Non-UK residents with a QROPS can, in some circumstances, pass on benefits at a lower tax rate when they die.

    Gibraltar

    Gibraltar QROPS

    Gibraltar has no DTA with Angola, therefore QROPS pension payments to you would be taxable in Gibraltar, 
    currently at a rate of 2.5%.

    No UK income tax if non-UK resident (for 5 tax years + or total withdrawals are below £100,000).

    No Gibraltar Inheritance Tax.

    Protection from UK IHT.

    Protection from UK death benefit charges, if non-UK resident (and non-UK resident for the last 5 years + before payment).

    Malta

    Malta QROPS

    Malta has no DTA with Angola, therefore QROPS pension payments to you would be taxable in Malta, at up to 35%.

    No UK income tax if non-UK resident (for 5 tax years + or total withdrawals are below £100,000). 

    No Maltese Inheritance Tax.

    Protection from UK IHT.

    Protection from UK death benefit charges, if non-UK resident (and non-UK resident for the last 5 years + before payment).

    Angolan tax

    Tax in Angola

    Residence is not defined in Angolan tax law as individuals are taxed on Angolan-source income only, irrespective of their residency.

    Taxable income includes business, employment, investments, and property. Angolan pension income is not included.

    Tax rates vary up to 17%.

    Therefore, foreign pension income and any pension lump-sums or annuities are outside the scope of Angolan tax.

    Therefore, there should be no Angolan tax:

    • on transfer from a UK scheme to a QROPS
    • on any investment growth (income or capital) in the foreign scheme
    • on payments from the scheme, and/or
    • on death of the member.

    Net wealth and net worth taxes are not imposed in Angola.

    Stamp duty only applies to gratuitous transfers of property located in Angola by a resident.

    Angola has not signed any DTAs.

    Your options

    QROPS pension options

    You have 3 main options:

    1. Leave your pension in the UK
    2. Transfer to a Gibraltar QROPS
    3. Transfer to a Malta QROPS

    1) Leave the Pension in the UK:

    If the pension remains in the UK, UK tax on the payments (up to 45%) would be due with no tax payable in Angola. Furthermore, the fund remains exposed to the UK death benefit charges.

    2) Transfer to a Gibraltar QROPS:

    Transferring to a Gibraltar QROPS for non-UK residents can alleviate UK tax on payments (at up to 45%) with 2.5% Gibraltar tax on payments and no tax in Angola, even if remitted. Furthermore, the QROPS can protect from the UK death benefit charges if non-UK resident (5 years +) and there is no Gibraltar IHT.

    3) Transfer to a Malta QROPS:

    Transferring to a Maltese QROPS for non-UK residents can alleviate UK tax on payments (at up to 45%) with up to 35% Maltese tax on payments and no tax in Angola, even if remitted. Furthermore, the QROPS can protect from the UK death benefit charges if non-UK resident (5 years +) and there is no Maltese IHT.

    Finally...

    We believe the above taxation information is accurate, however tax rates and rules can change, and we are NOT tax experts. Therefore, please do not rely exclusively on the information to determine your liability for tax.

    Speak to a local tax expert for personalised advice, or consult an international taxation consultancy.

    If you'd like our help with regard to your expat pension options, please get in touch and we will do all we can to help.

    Make smarter, safer decisions for your pensions.

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