British overseas pensioners holding pensions offshore will be liable to pay more tax under new plans outlined by the Government.
Currently, people who draw income from Qualified Registered Overseas Pension Schemes (QROPS) only pay 90% income tax on income generated by the fund. However, new proposals will make expat pensioners liable for the full income tax amount, mirroring the UK setup.
The move has been outlined to reduce the appeal of moving pension pots overseas, and reducing the tax burden as a result. This means that a higher-rate payer will see their income tax rate from 36% to 40% under the new guidelines. In addition, the Government has outlined plans to make QROPS harder to set up in future, and banned companies from cold-calling about pensions and investments, with fines of up to £500,000 for firms who break this rule.
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