Does any British expat living in Switzerland have experience in reclaiming UK tax on their UK personal pension pot which was cashed in as a lump and taxed by HMRC at withdrawal time, per the rules on the 75% part (first 25% being tax free) and after personal allowances etc? I was advised by an international financial advisor that this can be reclaimed at a later time and it apparently requires the Swiss tax office liaising with HMRC that the claimant will be paying tax on it, as part of their wealth tax while resident in Switzerland. Thus HMRC would only later refund the tax under the Double Taxation Agreement. However HMRC do not confirm this themselves. My advisor has not released any further details as it involved another customer and only said HMRC would clarify, albeit negatively in my case? Am I maybe missing something here? My pension holder/provider does not offer a better alternative like drawdown to residents abroad.
Article 18.2 of the UK - CH Dual Tax Agreement would imply that the lump sum is taxable in the UK:
"..a lump sum payment derived from a pension scheme established in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in the first-mentioned State. "
The DTA has been discussed a few times on the forum but in the context of people leaving CH to return to UK. They confirmed they were able to withdraw their pension earned in CH once in the UK and that HMRC confirmed that they did not have to pay tax on it in the UK.
Perhaps clarify with the Financial Advisor what he or she was referring to(?)
I only wanted to see if I could avoid the loss of paying UK tax on the 75%, and per that other advice I'd mentioned, were it possible. Wishful thinking maybe.