UK Indians can chose qualifying Indian pension scheme Over UK Pensions for Pension Savings !
There is some interesting investment options in India from UK. In the last one year, Most of the UK based Indian citizens have chosen Overseas Pension Scheme's (for example pension scheme in India) for pension contributions, instead of contributing to Workplace pensions in UK, since UK pensions are subjected to comparatively more regulations than in India. Contributing to Pension schemes in India, comes with many following advantages over UK pension schemes.
1) You can invest in Indian Pension scheme while you are working in UK itself.
2) You can expect good & stable growth in Indian scheme over UK one's.
3) Choosing Indian option makes you free from UK's regulations over your pension corpus.
4) More importantly, your pension contributions in overseas pension scheme,for example Indian qualifying scheme that qualify for UK tax relief are tax free unto certain limits.
5) You can get tax relief in UK on pension contributions In Overseas scheme (Indian scheme) upto 40,000 GBP every financial year.*
Below are the details that gives more information.
1. Overview
Your private pension contributions are tax-free up to certain limits.
This applies to most private pension schemes, for example:
Workplace pensions, personal and stakeholder pensions, overseas pension schemes that qualify for UK tax relief - ask your provider if it’s a ‘qualifying overseas pension scheme’ (This is applicable to you).
You pay tax when you take money out of a pension.
Limits to your tax-free contributions
You usually pay tax if savings in your pension pots go above:
100% of your earnings in a year - this is the limit on tax relief you get£40,000 a year - check your ‘annual allowance’£1 million in your lifetime - this is the lifetime allowance
The below link gives more details on the above given information..
https://www.gov.uk/tax-on-your-private-pension
Also, it is good to know “ PENSIONS TAPERED ANNUAL ALLOWANCE” to know your eligibility for pension contributions to an overseas scheme & to know the amount of tax relief that you are eligible to get from your contributions.
The details of ‘Pensions Tapered Annual Allowance’ are as follows :
Who is likely to be affected?
This affects:
Individuals with income of over £150,000, including the value of any pension contributions, who save in a registered pension scheme will be affected by the taperall savers in registered pension schemes will have their pension savings measured over a tax yearscheme administrators of registered pension schemes and advisers who have clients who are members of registered pension schemessponsoring employers of occupational registered pension schemes.
General description of the measure
The measure will restrict pensions tax relief by introducing a tapered reduction in the amount of the annual allowance for individuals with income (including the value of any pension contributions) of over £150,000 and who have an income (excluding pension contributions) in excess of £110,000. In order to facilitate the taper, legislation will also be introduced to align pension input periods with the tax year as well as transitional rules to protect savers who might otherwise be affected by the alignment of their pension input periods.
One can go through the below link for more details on “ PENSIONS TAPERED ANNUAL ALLOWANCE”
We wish to schedule a free, no obligation telephone or Email consultation to discuss ways we can help yourself and any of your colleagues. You can reach us with the following contact details.
Mr Ravi Kumar. Financial Consultant (Code: 60272381, QROPS Consultancy),
A&B Law & Financial Associates, No-2720, 12th, Main, Jayanagar 4th Block, Bangalore-560 011
Cell: +919844519872
Email: ravi.sampige@gmail.com
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