Perks of Retiring abroad

British people retiring abroad could be affected by the UK's pre-election Budget this week, if speculation that George Osborne will give more flexibility to existing annuity holders and introduce kinder inheritance tax rules is true.

“Proposals to set up a market for second-hand annuities, expected to be announced on Wednesday and come into effect in April 2016, would allow existing holders to sell their annuities without incurring hefty penalties,” said Angelos Koutsoudes, Head of OverseasGuidesCompany.com. “This would be great news for pensioners living abroad who currently receive annuity income but are not dependent on it, and would like to receive some or all their annuity as a cash lump sum. For expats in the Eurozone, this could be especially appealing if sterling continues to remain strong against the euro – but, of course, we'd need to see what the rate is doing in a year's time. Above all, we would encourage expats or people planning to retire abroad to speak to a financial adviser, as this route won't suit everyone. For example, for some retirees abroad, transferring their pension into a QROPS might be the most tax efficient option.

“There are also suggestions that Osborne may announce further changes to the way beneficiaries of a deceased's pension pot are taxed, complementing new rules that come into effect in April 2015 – which makes careful estate planning even more important for future expats.”