With your pension income you could be taking advantage of the many perks of life in one of South America’s safest and most beautiful countries, as soon as you get expert help with the complex financial ramifications of retiring abroad.
Also consider reading: How to transfer a UK pension to Spain as an expat
Where do I begin in moving my UK pension to Argentina?
First and foremost you will need to have your existing pension information to hand, then I can begin to establish the most tax efficient course of action for you for a pension transfer from the UK to Argentina. I will also take care of all of the following requirements I’ve outlined in the checklist below:
Checklist for transferring a UK pension to Argentina
- Collate all existing UK pensions
- Request a CETV (Cash Equivalent Transfer Value)
- Conduct a cost and performance comparison
- Shop around for the best overseas scheme for you
- Submit transfer request documentation to both your existing and new providers
It is important to be aware that unless your current UK advisor is also licensed and qualified abroad, they will not be permitted to help you choose an overseas pension scheme.
There are a great many expat financial planning issues, international products and services that are highly important for you to consider. With my experience and expertise I can help you with all of these.
Additionally, not every UK pension provider allows you to keep your pension in the UK while some other pension schemes cannot transfer your pension abroad.
Speak to me for advice about moving abroad and for help with the tax implications of receiving income from a pension transfer to other countries.
Which UK pension scheme do you have?
The very first thing to do is ascertain which type of UK pension you have. If you’re not sure whether you have one at all, you can always use the Pensions Tracing Service and, if you are employed, ask at work.
Workplace Pension Scheme
If you were ever employed in the UK from 2012 onwards you should have been auto-enrolled onto a workplace pension.
These tend to be either a ‘final salary’, also known as defined benefit (DB), or a ‘money purchase’, that is, defined contribution (DC) pension scheme.
The scheme administrator invests your money for you while you receive tax relief on your contributions at your marginal rate of income tax. Among other factors, the final size of your pot will very much depend upon how well these investments perform.
Older workplace schemes often restrict when you can get your hands on your own retirement income, and some force you to purchase an annuity out of your pension savings.
It’s possible that you’ve accrued quite a few pensions if you’ve changed employers from time to time. With my help you could take back control by bringing them together and then convert all your existing retirement funds into a more flexible and portable pension fund.
This can be an essential first step towards early or phased retirement, and also make it much easier to retire abroad when you are ready.
A personal pension scheme is usually one which you arrange yourself, separately from your workplace, although some employers do offer them as workplace pension schemes. Typically in both cases these are defined contribution plans, as described above.
In exactly the same way as a workplace pension you’ll receive tax relief on your contributions to a personal plan, providing it is registered with His Majesty’s Revenue and Customs (HMRC).
Again, your money will be invested by the pension scheme administrator and its performance determines how much income you receive upon retirement.
Personal pension schemes can be subject to the same sort of restrictions as workplace plans, and often set a minimum age of 55 before you can access any of your retirement savings. This could soon rise to 57.
Small Self Administered Scheme
For company directors, senior executives and their relatives a small self-administered scheme, or SSAS, is an HMRC registered arrangement for up to 11 individuals. It allows for greater investment flexibility and freedom.
It is usually possible to transfer the value of an SSAS to another pension provider or scheme, but you should seek independent, personalised advice first to make sure this is wise in your particular circumstances.
Self Invested Personal Pension
Another type of defined contribution scheme, the self-invested personal pension (SIPP) is a more convenient and up-to-date way to save for your retirement than some of the older plans, especially if you are considering moving abroad.
Some of the best things about SIPPs include, among others:
- Flexible retirement income, drawdown gives you the freedom to decide how and when you withdraw your money
- The option to purchase an annuity in return for a guaranteed income, but no obligation to do so
- An opportunity to consolidate all or most of the old pension pots you may have scattered throughout your career
- Control – you will have much broader investment options than many other pension schemes can offer
- Choice of international currency to reduce costly exchange rates
- Tax advantages for your heirs when they inherit what’s left in your SIPP, there may be no inheritance tax for them to pay
Your contributions to a SIPP are eligible for UK tax relief in just the same way as the other schemes mentioned above. Investment decisions, however, become your responsibility and while this can lead to greater returns it can of course mean greater risk.
Although they are usually based in your country of residence, a SIPP is easily moved offshore and converted to its international version, the iSIPP, for expats.
All SIPPs are regulated by the Financial Conduct Authority, or FCA.
Who can transfer their UK Registered Pension Scheme?
As a general rule a UK registered pension scheme could be eligible for pension transfer, however there are always exceptions.
If you have a UK government, overseas service or NHS pension, for example, you might not be able to move it either to the same country you choose to retire in, such as Argentina. It might not be eligible for pension transfer even within the UK.
It is important to explore your options with an independent, regulated financial advisor in this case. Then you can determine whether your UK pension scheme administrator is authorised to facilitate either overseas pensions schemes or internal pension transfers.
Should I choose a Qualifying Recognised Overseas Pension Scheme or an international SIPP?
HMRC set out certain requirements for qualifying recognised overseas pensions schemes, known as QROPS for short, and they maintain a regularly updated list of providers.
It is vital to check that any QROPS you are considering is recognised by HMRC not only to verify it isn’t a scam, but also to avoid tax charges of up to 55% on the transfer. You can do this by visiting the HMRC website and searching by name.
A pension transfer to any overseas pension scheme is a benefit crystallisation event and as such it can become quite complicated. QROPS are no exception.
Speak with me first for qualified advice on your individual circumstances and to ensure that you are compliant with all the red tape and to avoid excessive fees.
A QROPS scheme (Qualifying Recognised Overseas Pension) can be a beneficial choice for those of you with funds in excess of £150,000. However, there are many factors you should consider carefully with an advisor before you make any decisions to transfer your pension overseas.
For example, Argentina has no local QROPS providers so your pension would have to be based in a different financial jurisdiction from the one in which you live. This automatically triggers an overseas transfer charge of 25%.
International SIPPS do not incur the 25% tax charge on overseas transfers and they can also be much quicker to set up.
When living in Argentina your international SIPP would be based offshore giving you a choice of major currencies to denominate such as GBP, US dollars or Euros.
Pension withdrawals can then be made directly in Argentine nuevo peso, or ARS, from whichever bank account you find most convenient. You can choose from either an Argentinian or an international bank account.
There are alternative courses of action which may be preferable for you. Once you’ve opened a bank account in Argentina you could simply move your money into it online from your offshore account, converting it from whichever currency you have chosen into ARS.
Tax treatment of expat retirees in Argentina
It can be possible to live off your retirement savings from within Argentina without paying tax.
You may have to pay tax on any offshore retirement income, such as from one of the overseas pension schemes discussed above, but there are tax treaties in place to help.
Argentina has progressive personal income tax rates, ranging from 9% to 35%.
However the precise tax position for any expat retiree living in Argentina will depend not only upon their individual financial circumstances but also their residency status.
Tax residency typically begins after twelve months of living in Argentina.
There are two renewable one year resident permits suitable for retirees to choose between, the Pensionado and the Rentista visas.
You can apply for these fairly quickly and easily online via the RaDEX (Módulos de Radiación a Distancia de Extranjeros) system on the Ministry of Interior website.
It is a good idea to discuss your options with a suitably qualified and experienced immigration lawyer first.
The Pensionado, or pensioner, visa is for foreign nationals who can provide proof of income from their pension abroad. Technically this must be at least ARS30,000 per month. At the time of writing this is equivalent to a little over £100 GBP, $130 US or around EUR120.
If you have any dependents living with you in Argentina there may be additional amounts required for each of them.
You cannot be employed as a Pensionado visa holder in Argentina but you may be permitted to set up a business or undertake international freelance work on a self employed basis.
After the first year you will need to renew your Pensionado visa for another year, providing you still meet the requirements.
Some of the documents you may need to attach to your online application for the Pensionado include, but are not limited to, a clean criminal record from your own country, valid passport with entry stamp, proof of residency such as a utility bill in your name, proof of pension income. Usually these will need to be translated into Spanish.
When you have successfully renewed this permit twice, you become eligible to apply for permanent residency.
Another retirement-friendly residency option in Argentina is the Rentista, or financier, visa scheme.
Although on paper the Rentista requires the same minimum income as the Pensionado, in practice you must demonstrate that you are a person of independent means.
No minimum investment is required in order to secure either of these visas but you will need to provide proof of revenue exceeding ARS450,000 each month. This is currently at least $2000US, or around £1600/EUR1800.
This income can come from a range of guaranteed sources such as dividends, rental incomes and of course, pensions.
You will also need an in person interview with a consular officer, and to pass the same criminal background checks and other requirements as the Pensionado.
How to transfer UK pension to Argentina FAQs
Can I cash out my UK pension if I move abroad?
Usually, once you are 55 years old you can take out a Pension Commencement Lump Sum, or PCLS, of up to 25% tax free while you are still a UK resident.
If this is something you are considering it is usually best to do so before you move to Argentina otherwise you could pay tax on the withdrawal at your prevailing local rate.
Can I transfer my pension internationally?
Many UK pensions can be transferred to an overseas pension scheme. There can be many tax benefits, depending upon which overseas pension option is best for you.
Moving your UK pension overseas is always a decision to take carefully with advice and support from an independent financial advisor, like me, who has the requisite qualifications and experience.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
Overseas pension transfers can be complex. Make sure you take financial advice before you transfer your funds.