I have a little experience dealing with these about 5 years ago. It very much depends where you are moving to, eg in OZ (from memory) the benefits are pretty much tax free. I have a contact who deals with QROPS on a full time basis if you want to get in touch with her.
As for the UK, after the 25% PCLS (tax free cash in old money), in capped drawdown you are limited to 120% of GAD. In Flexible DD income is not restricted and you can deplete the fund and as you wish, but to enable you to use Flexible DD your guaranteed income needs to be in excess £20,000 pa. Any income taken from either arrangement will be taxable at your highest marginal rate. eg 20/40%
The Minimum Income Requirement (MIR) will involve an individual demonstrating a sufficient level of secure income.
This secure income must:
- Be in payment – i.e. it is not an entitlement to future benefits,
- Be guaranteed for life,
- Be at least £20000 per annum gross
An individual’s State Pension and State Second Pension (S2P) will count towards the Minimum Income Requirement (MIR), as will income from final salary pension schemes and lifetime annuities already in payment.
In terms of IHT, the money (not spent) will form part of your estate on death and be subject to 40% tax, after application of the NIL rate band. Therefore you have to do something with the cash/income, otherwise it is potentially liable to both income tax then IHT.
Please bear in mind that if in DD when death occurs the pension can continue paying out to a spouse/dependent (s) as before. The 55% tax only applies if your beneficiaries want the cash.
hope that helps.