Israeli Residents

Recent changes to Israeli Tax Law means that if you are resident in Israel and receiving pension income from a UK registered pension scheme you may become liable to full UK taxation - with no facility to enjoy full tax relief at source. Liabilities to UK taxation may have arisen already.

It is possible to mitigate, where pension savings accrued in a UK Registered Pension Scheme are transferred to an appropriate Qualifying Recognised Overseas Pension Scheme - a “QROPS”.

In particular, some overseas territories may permit pensions to be paid gross to non-residents. If UK pension savings are transferred to a QROPS in such a territory, the result could be that a new Israeli resident may not incur tax in Israel on pensions payable from the QROPS – for up to the first 10 years of Israel residency - but thereafter normal Israeli taxation should apply.

Each case is different and requires specific tailored advice. The issues are complex and the rules ever changing.

It is not obvious that a QROPS is always appropriate as for smaller pension funds charges may outweigh tax benefits. The nature of the UK pension scheme and the underlying investments must also be taken into account.

We have amassed an unusual and exceptionally broad experience in advising on these matters – and have advised many individuals and family groups who have emigrated on the options available in respect of their UK pension savings including those who have made and/or intend to make Aliyah.

The wide experience that we have developed is available to our clients and their other professional advisers.

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