Top tips for retiring to Malta
By International Adviser, 6 Aug 18
Avoid retirement regret by asking these key questions before making the big move to Malta
The UK-Maltese Double Tax Treaty (DTT) gives the taxing rights on company, private and the UK State Pension to the country of residence (for government pensions, the right to tax remains with the country of source).
So, these would only be taxable in Malta.
The Maltese non-domicile rule appears to suggest she could avoid tax altogether if she did not remit her pension income into Malta, but the DTT has a specific clause which allows the UK to tax any UK pension income not remitted to Malta.
Potentially, this could have been eliminated by transferring the Sipp to a qualifying recognised overseas pension scheme (Qrops); which, as it is outside the UK, would fall outside of the DTT rules.
But, the reduction in choice of Qrop territories to basically Malta and Gibraltar provides a roadblock; Malta would mean the Qrop would be taxable in Malta on the arising basis, and Gibraltar does not allow commutation of benefits in excess of 150% of government actuary’s department (GAD) rates.
It may, therefore, be the best Tracey can hope for is to take the 25% tax free lump sum, and then suffer UK tax on the pension income (the UK personal allowances are higher than those in Malta), and perhaps use these monies when she travels back to the UK or elsewhere.
How could she invest her excess capital?
Tags: Blevins Franks | Jason Porter | Malta
