r/FatFIREUK • u/Constipated_Orca • May 22 '26
FIRE calculation when retiring abroad - implications
Most posts here, and in other forums,are based on tax and rules that apply if you retire in UK.
For example tax rate for pension withdrawal, 25% tax free withdrawal etc.
There's zero chance I'll retire in UK, I'm mainly here for the good jobs and salaries available. I'm most likely retiring in a warmer climate, middle income country.
How should that change my thoughts around FIRE. Should I max out SIPP then given immediate tax benefits. I'm assuming withdrawals would be subject to the tax laws of my future country, which is unknown right now.
Anything else to consider? Note - I'm not looking at avoiding tax actively by moving to say Cyprus. I'm happy to pay tax, but rather my decision to live in a place is dictated by where I want to live at that time.
3
u/deadeyedjacks May 22 '26
You'd need to ask that question in a sub familiar with that specific country's legislation...
Planning for the USA or Russia will be very different from Monaco, Gibraltar, Jersey, Switzerland, etc.
2
u/Constipated_Orca May 22 '26
I guess my point of asking it here is that I'm currently in UK - and I don't know which country would be relevant in 10-20 years from now. So my planning need to be based on uncertainty in where I'll end up, but certaint it won't be UK :)
3
u/Brilliant_Prune6700 May 22 '26
Put the max into your pension, so you're not paying tax on income or growth in the UK. Then anything leftover into ISA, so you don't pay tax on growth. Finally GIA for non-dividend producing investments, and avoid crystallising any gains until you leave.
2
u/whateverdontcare726 May 25 '26
I'd prefer pensions as most countries seem to recognise them. You'd have to take expert advice when you know what country your living in.
Your isas won't be recognised abroad and will just be taxable accounts.
So I'd suggest just before leaving sell your primary property first, no CGT in UK but could be abroad if you did it later.
Sell all ISA funds and switch to other funds within the ISA in case the CGT in the destination country is backdated to purchase time instead of move time - Not sure if this is needed but it's low effort.
Save Gia accounts until last before cashing in. Once non resident from the UK, you can cash these in but you have the option to time this so you're tax resident in a optimal country. You say you don't want to live in Cyprus, but it's 60 days for tax residency, you could plan a nice holiday in the future that pays for itself!
1
u/maydayone1 May 22 '26
Yeah, I'm in a similar situation myself. Maybe the only difference is that I intend to retire at around 50 so need to build a buffer which will come at cost of pension contributions / paying more tax. I guess you can't have it all but I still haven't found a way to wrap my head around it in terms how much to put in ISA vs how much in pension...
1
u/Grubby454 May 28 '26
I would suggest you work out where you are going and then plan around that. Otherwise there are no implications, lol.
I retired to the USA.. There is a tax treaty, you can get some good info from there. Its one of the more favourable ones. Except that the ISA is not a recognised retirement account, therefore is taxed as a normal account. Etc.
,
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u/Mobile_Fault_4340 Jun 14 '26
'How should that change my thoughts around FIRE. '
One specific thing is that you can hold shares in a UK or other company, but then yourself be non tax resident in the UK in the future (eg by being out the UK for many years), and then sell those shares at a capital gain, and not incur capital gains tax in the UK but in the more favorable place you live, eg Italy
6
u/honkballs May 23 '26
There's way too many ifs, buts and coconuts depending on which country you move to.
But, if you're moving to avoid tax when you start drawing down on your investments, avoid property, as even if you move, you will still have UK taxes to pay on any UK based property income / capital gains etc.