Income Tax (Earnings and Pensions) Act 2003 section 579CA

Temporary non-residents

Section 579CA ensures that certain pension withdrawals taken from registered pension schemes during a period of temporary non-residence are brought back into the UK tax charge when the individual returns to the UK, provided the total of such withdrawals exceeds £100,000.

• Flexible drawdown pension withdrawals and certain other pension payments taken while temporarily non-resident are treated as taxable pension income arising in the tax year of return to the UK, but only if the combined total exceeds £100,000
• Relevant withdrawals include income withdrawals from flexi-access drawdown funds, short-term annuities purchased from such funds, uncrystallised funds pension lump sums, certain flexible annuities, small scheme pensions under money purchase arrangements, and pre-April 2015 flexible drawdown payments
• Withdrawals paid in a foreign currency are converted to sterling using the average exchange rate for the year ending 31 March in the tax year of payment, for the purpose of testing against the £100,000 threshold
• Double taxation agreements cannot be used to prevent the UK income tax charge that arises when these withdrawals are treated as accruing in the period of return