Overseas – continuing to pay contributions to a registered pension scheme after leaving the UK
This case study looks at continuing to pay pension contributions to a registered pension scheme after leaving the UK.
When someone moves overseas, they can still pay tax relievable contributions of up to £3,600 a year (gross) for up to five tax years after the tax year they left the UK. The contributions must be to a plan they were a member of before they left the UK.
In this case study we look at how this works in practice.
Christine earns £3,500 a month payable on the first of every month (in arrears) and pays a gross pension contribution of £400 a month to a personal pension plan.
On 2 August 2023 she leaves the UK to live and work in France. Her UK earnings for 2023/24 are therefore £14,000 (four months at £3,500 a month) and she can continue to pay £400 a month until the end of the tax year and receive tax relief.
For the next five tax years, that is from 6 April 2024 to 5 April 2029, the maximum gross tax-relievable contribution she’ll be able to make is £300 a month (£3,600 a year). From 6 April 2029 she will not be entitled to tax relief on any contributions she makes to a UK registered pension scheme.
If she had left on 2 May 2023, she would only have earnings of £3,500 in 2023/24 and so could only pay £400 a month for a total of nine months in 2023/24 as £3,600 would be the maximum amount of contributions she could pay with tax relief.
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All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.