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Because you live in the UK you can
plan now to maximise your returns

The "A" day regulations (also known as pension simplification legislation) passed in April 2006 created excellent opportunities for tax planning.  The two major changes that created the opportunity are: the removal of a salary contribution cap on tax free contributions and its replacement with the annual allowance system, and; the formalisation of the overseas pension transfer process.

These allow far greater control for the individual to plan when, where and why they will make pensions contributions.
 

more earnings more savings

The saving solutions proposed here are scalable up to £225,000 of earnings a year

 

 

Plan well and get returns in excess of 200%
 on investments up to £225,000

Consider the following worked example for a someone planning well under two scenarios, straight contributions and salary sacrifice, where they can achieve massive tax savings: (Also consider that this example is scalable up to the maximum level that you can contribute and still gain full tax relief which is £225,000 a year.)
 

Straight contributions - return on investment of 268%

  1. Make a £20,000 contribution into a pension fund prior to leaving the UK, net cost £12,000 for the high rate tax payer

  2. Opt out of the second state pension (S2P) giving approximately £1,700 a year, net cost £0

  3. Total pension fund is now £21,700

  4. Return to New Zealand: (two options)

    Over 50:

    Immediately access 30% of the fund tax-free, giving you £6,420.

    Remaining in the fund is £14,980 (which you have only paid in £5,580 for, that is your initial £12,000 less the £6,420) - that is a return on investment of 268% before taking into account fund growth - one of the best you will get.

    After five full tax years outside the UK you can withdraw all of the remaining money.
     

    Under 50:

    After five full tax years outside the UK you can withdraw all of the remaining money.

 

 

    

Salary sacrifice - return on investment of 370%

  1. Sacrifice £20,000 of salary or bonus into a pension fund prior to leaving the UK, net cost £10,460 for the high rate tax payer with generous employer

  2. Opt out of the second state pension (S2P) giving approximately £1,700 a year, net cost £0

  3. Total pension fund is now £21,700

  4. Return to New Zealand: (two options)

    Over 50:

    Immediately access 30% of the fund tax-free, giving you £6,420.

    Remaining in the fund is £14,980 (which you have only paid in £4,040 for, that is your initial £10,460 less the £6,420) - that is a return on investment of 370% before taking into account fund growth.

    After five full tax years outside the UK you can withdraw all of the remaining money.
     

    Under 50:

    After five full tax years outside the UK you can withdraw all of the remaining money.

 
       

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