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Readers' forum : Chinese cracker

24 January 2017
Issue: 4584 / Categories: Forum & Feedback

UK taxation of pension benefits for a Chinese resident.

My client is a British citizen who has worked in the UK for many years during which time he contributed to a UK registered money purchase pension scheme. He then moved to China to work full time and ceased to contribute to the scheme.

My client is now old enough to take his pension benefits. He would like to take the 25% tax-free lump sum and the whole of the remainder of the scheme value. The latter element would usually be taxable in the UK even for a non-resident.

The UK-China double tax treaty covers pensions in Art 18. My client is a resident of China and not resident in the UK. This article appears to override the ability of the UK to tax the remaining amount.

This outcome appears too good to be true. Could readers offer any views or experience particularly on whether the pension...

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