We often hear the argument that Malta is a superior home for your pension as it has double taxation agreements (DTAs) with numerous countries meaning that regardless of where you retire you won’t pay tax at source but only in Malta.
It is certainly true that pensions in Malta are paid out gross and then the pension holder must pay tax according to their country of resident.
However, it is also true that the UK has 130 DTAs with countries around the world. A simple Google search of “UK double taxation agreements” will tell you all you need to know. Obviously, you should ignore any websites that might not be credible but focus on the www.gov.uk or any similar site relevant to where you are resident (e.g. search for: “Italy double taxation agreement with the UK”).
You can even download the ‘Digest of Double Taxation Treaties’:
An advisor might try to lead you to believe that although you can receive your pension exempt from UK income tax it is an inconvenient process to go through. Nonsense! It is a simple case of making sure that the relevant parties are aware that you are resident outside of the UK – i.e. your pension provider, HMRC and the relevant tax authority for your country of residence.
In fact, these are all parties who should be aware of where you live anyway!
It is certainly no less or no more inconvenient than some of the hoops a QROPS trustee in Malta will make you jump through to verify where you are resident.
If you live abroad and want to make sure you are compliant with UK taxes then we suggest making use of the UK government’s guidance here.