UK Pension taxed despite living overseas?

Discussion in 'Living Overseas' started by opsmeister, Apr 6, 2010.

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  1. Gents,

    I have left the military and I am now enjoying the perks of tax free live in Dubai (as with anything good bits and bad bits). I am a resident and my UK tax code has been adjusted to make sure that my new salary isnt ripped away from my hands. I asked my accountant (a man wholly unfamiliar with the military) as to whether or not I could get my UK pension tax free as well. It seems fair to me. I am not able to enjoy any of the perks of being a tax payer, so why should one salary be tax free and the other not. He tells me, for reasons I do not entirely understand, that I cannot be tax free on my pension.

    Do any of the wise out there know if this is true? I want to believe him, but I thought I would check to see if there is anyone in the same boat who thinks other wise?

    Many thanks

    OM
     
  2. Pension income earned in UK, therefore taxed in UK.
     
  3. The tax man doesn't give a fig where you are. He is only interested in where the money comes from and in the case of money paid to you from HMG then he is going to tax it.

    Can't remember the rate but it is only a couple of quid a month normally.
     
  4. All depends on what your total UK earnings are:

    When you reach State Pension age you no longer pay National Insurance contributions, but you don't automatically stop paying Income Tax. If your UK taxable income such as income from renting a property, investments, including your pensions is more than your tax-free allowances you're still a taxpayer.

    Normaly a State Pension by itself is lower than your tax-free allowances, but if you also have a Occupational and/or a Service Pension this may well put you into the Tax Paying Bracket.

    All you need to know from DirectGov:

    http://www.direct.gov.uk/en/Pensionsandretirementplanning/TaxandNationalInsuranceinretirement/GettingyourtaxandNationalInsuranceright/DG_10014855

    also read

    http://www.direct.gov.uk/en/Pensionsandretirementplanning/TaxandNationalInsuranceinretirement/GettingyourtaxandNationalInsuranceright/DG_10014681
     


  5. I stopped paying my National Insurance contribution 2 years ago when I was 60. If you have payed a full stamp for 40 years you don't need to pay any more.

    Also when I was working as a contractor in Iraq and declared as non- resident my accountant got back my tax I paid on my military pension.
     
  6. Sixty

    Sixty LE Moderator Book Reviewer
    1. ARRSE Cyclists and Triathletes

    Bear in mind that HMRC may apply a tax coding of NT (non-taxable) if you're resident in a country with a reciprocal taxation agreement but these are to cover you from being taxed twice on the same income.
     
  7. Is there a dual state taxation agreement between the UK and Dubai? I also believe (although this does not apply in my case so far) that you have to have been resident in the UK for a period of time in order to pay uk tax; however there is a requirement to declare it to your local tax authority so that they may determine any 'contributions' you might be required to pay.

    By declaring non-residency you at least stop paying for the sponging twats that defend Labour on here.
     
  8. I am non-resident in the UK and there is a double taxation agreement with the vaterland but that doesn't stop the UK tax office from taxing my army pension.

    As I said it is only a minimal sum but they still take it off me.
     
  9. Then you haven't declared yourself non-resident in the UK and ( I assume )you have not informed the German Taxation authority; you cannot be taxed twice on a single income (especially in the EU )
     
  10. Wrong and wrong :) oh and right but that doesn't stop it happening they just call it something different.

    The phrase they use is "progressionsvorbehalt" and it means that they stick the amount I get in pension onto my yearly earnings and then tax the whole lot.

    I even took the German tax authorities to court and won even though it still cost me 5000euros (they wanted 26,000).

    The whole sorry saga of tax on miltary pensions in germany is on here somewhere and on any number of other expat sites.

    Heres one http://britishexpats.com/forum/showthread.php?t=591774
     
  11. Same situation with me. I contacted HMIT some years ago about the taxation of my pension and was told that HMG (via HMIT) has first call on my money and the situation (for me) is not negotiable. NI contributions do not apply to me.