x Abu Dhabi, UAESaturday 22 July 2017

Pension options as plans are made for Thailand retirement

On your side: Keren Bobker answers questions on a UK pension scheme, due notice to tenants and limited contracts.

I have a pension plan in the UK and the company started paying me an income last year on my 60th birthday. I have been in the UAE for 10 years and plan to move to Thailand to retire in a couple of years. I didn't really pay much attention when my old employer sent me the paperwork and I would now like to look at my options as I believe there are changes I could make that would be more beneficial given my circumstances. I have been told that I could move the pension offshore but is that legitimate? - GP, Abu Dhabi

While certain types of pension schemes, even those that are "in payment", can be transferred, this is not always the case. Whether this is a good idea depends on legal factors and individual circumstances. Further investigation shows that GP has been a member of a defined benefit scheme, also known as a final salary pension - a pension scheme run by an employer in the UK. Her Majesty's Revenue & Customs states that transfers for "in payment" pensions must be on a "like for like" basis - so the type of pension you get after the transfer must be the same as the previous pension. This does not apply in this situation as guarantees offered by such arrangements cannot be replicated on transfer to a personal arrangement, either in the UK or offshore. The offshore pension scheme that GP refers to is a Qualifying Recognised Overseas Pension Scheme, more commonly known as a QROPS. These schemes offer certain tax advantages to UK non-residents who remain overseas at least five years, but they are complicated and frequently mis-sold. If they are set up wrongly or inappropriately, they can be disallowed, leading to significant tax charges for the individual. Therefore, it is important that all options are considered and advice taken from a qualified adviser.

 

We have a tenant who won't leave our two-bedroom apartment in Motor City, Dubai. The tenants pay a really low rent due to the recession, while we, as the owners, pay really high mortgage rates. Now I have been told that the tenants need to be given 12 months' notice to leave. At the end of the 12 months we may decide to sell or move in. However, we do not know for sure now. Please can you suggest the best way forward for us? - LS, Dubai

The law in Dubai states that if you want a tenant to vacate a property you have to give them 12 months' written notice. This is the same whether you want to live in the property yourself or to sell it. Failure to give 12 months' notice gives the tenant the right to challenge this request. The only other way to evict a tenant is if they break the terms of the contract by failing to pay the rent, subletting or carrying out a business or illegal activity at the premises. If you want to increase the rent, this can be done only upon renewal of the lease, although you must give 90 days' notice of any increase and follow the Rera (Real Estate Regulatory Authority) guidelines. Use the online rent calculator to find out the area's average price for a similar property. If the rent you charge is less than the average, you may increase it, but only by the amount permitted and that depends on how far below the average rent you currently charge. In last week's column, I wrote about mortgages and what to do if you are paying a high interest rate. You may find it useful to refer to that.

 

My husband has worked for a company for nearly three years and has a limited contract. This will expire at the end of June and we do not want to renew as we plan to return to Canada this summer. The company wants him to stay and will automatically renew his visa. What does my husband have to do to avoid automatic renewal so that he may leave the company without breaking any rules? - SP, Al Ain

Your husband must check the terms of his employment contract to clarify the notice period he is required to provide. Formal notice should be given in writing and he should request acknowledgement. If the contract does not mention a notice period, which can be the case with a limited contract, it is generally assumed that 30 days' notice is required. Even if the company starts the renewal process, they cannot proceed without his passport and a medical examination and those are under his control.

 

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at keren@holbornassets.com