Retiring abroad: Italy

If you dream of retiring abroad like many UK pensioners, it's a big decision that can affect your pensions. In a poll carried out in 2006, the majority of Britons, 53%, would consider emigrating. Indeed, more than 300,000 individuals leave the UK each year to start a new life overseas. Estimates suggest that up to 5.5 million British nationals now live abroad. Italy is the fifth largest expat destination, after France and Germany.

According to a lifestyle survey of British expats by the British Embassy in Rome. The total number of British citizens estimated to be living in Italy in 2021 was 30,000. Spain is the number one destination for British expats in Europe, followed by Ireland. As of 2017, the Department for Work and Pensions data shows 5,300 Britons have received a UK state pension in Italy.

Ranking British expats by country

• Australia
• USA
• Canada
• Spain
• Ireland
• New Zealand
• France
• South Africa
• Germany
• Italy
  
  

Retiring abroad Italy: Golden visa

A second but more expensive option is the Golden Visa. The Italian government launched in 2017 to promote foreign direct investment. 

Here are the advantages of getting an Italian Golden Visa:

• Eligible for Italian citizenship after 10 years
• Benefit from a special tax regime
• Free to travel within the Schengen Zone
• Include your family in your application
• Work permits for you and your family can work in Italy
• Benefit from the Italian national public healthcare
  
  

Either an investment in the following: 

• €2 million investment in Italian government bonds
• €500,000 investment in an Italian limited company
• €250,000 investment
• €1 million donations to a philanthropic initiative
  
  

Any of the above will gain family Italian residency for 2 years. After this, an extension can be applied for 3 years. 

The Golden Visa provides the investor and their family with the right to live and work in Italy. After living in the country for 10 years, it is possible to apply for permanent residency.

Retiring abroad Italy: pension advice

The problem for most UK nationals. Is that, most UK advisers are not regulated to advise EU residents. These went with Brexit.

Unless they are regulated in the EU, they should not be advising you.

Should the UK firm have taken the appropriate steps to advise EU residents. They may not be aware of the complexity of the Italian tax system.

Although Regulated Advice cannot help here. You must find an advisory firm regulated in Italy that knows UK regulations. The firm would also require knowledge of UK and Italian  taxation. Including their interaction.

Retiring abroad Italy: taxation advice

If you move abroad, you don't have to transfer your UK pension pot. You can choose to leave it in the UK.  You can then take an income from it in the UK.

As an Italian resident, your UK state pension is only taxed in the UK. But any income derived from any other pension will be subject to taxation in Italy

It is important to note that Italy does not have a 'tax-free lump sum'. If you have not moved to Italy yet and want a lump sum. Taking it while you are still a UK resident will save you tax.

Qualifying Recognised Overseas Pensions Scheme (QROPS)

The setting up of a foreign exchange account should address currency risk.

Alternatively, expats often consider transferring their pensions to a QROPS, avoiding currency transfer risks.

 

Retiring abroad:  Australia | New Zealand | USA | Canada | Spain | Portugal | Italy | France | Germany | Ireland