Tax on Pension From UK

[PaulB]

Dear Fonts of All Knowledge,

I have been working overseas for the last 15 years, outside the UK. I do receive a Police Pension due to early retirement caused by medical condition from on the job trauma. I have never really thought about it until now but have not managed to find the answer on Google.

I pay tax on the Pension but I am only ever in the UK for around 14 days a year. Can I claim this back or is as it is earned in UK I still pay. I only ask as when researching I found that your State Pension, if you live that long, can be paid tax free.

Any advice welcomed and if I get the tax back I might be tempted to offer a few cold ones!!

 

Paul

[Dave Hounddriver]

45 minutes ago, PaulB said:

I pay tax on the Pension but I am only ever in the UK for around 14 days a year. Can I claim this back or is as it is earned in UK I still pay. I only ask as when researching I found that your State Pension, if you live that long, can be paid tax free.

My mother gets a small state pension from the UK and only worked there for about 2 years before moving to Canada.  She was told she did not have to pay tax on it and that was true, in the UK, but the Canadian tax authorities got hold of the info and said that the income is added to her Canadian Income and if it puts her over the threshold of what she can earn in Canadian pensions then she has to pay Canadian tax on the UK pension.  Sorry I cannot add more info but hope that little snippet helps 

[Huggybearman]

52 minutes ago, PaulB said:

Dear Fonts of All Knowledge,

I have been working overseas for the last 15 years, outside the UK. I do receive a Police Pension due to early retirement caused by medical condition from on the job trauma. I have never really thought about it until now but have not managed to find the answer on Google.

I pay tax on the Pension but I am only ever in the UK for around 14 days a year. Can I claim this back or is as it is earned in UK I still pay. I only ask as when researching I found that your State Pension, if you live that long, can be paid tax free.

Any advice welcomed and if I get the tax back I might be tempted to offer a few cold ones!!

 

Paul

I am in the same position and only a couple of weeks ago sought advice from HMRC.

Unfortunately you will pay UK income tax on any occupational pension earned in the UK regardless of where you reside. You will have received tax advantages whilst contributing to your UK pension and it is now the UK government will claw back some of those benefits in the form of income tax. 

The UK state pension is paid gross, so there is no tax to claim back on that. If the state pension pushes you over any tax threshold then your occupational pension will be taxed accordingly by adjusting your PAYE coding.

You do not pay National Insurance when you reach 65.

Ken

 

 

Edited July 20, 2017 by Huggybearman

[Snowy79]

Yes. I'm afraid any Government pension which includes your Police and State pension is added together. You then work out your annual tax allowance, remove that from your total pensions then anything over that you pay tax on. 

Currently the first £11,500 is tax free. You then pay 20% on anything over that up until £43,000. 

Edited July 20, 2017 by Snowy79
Additions.

[Gary D]

Although your pensions are not taxed in the Philippines

[Snowy79]

3 hours ago, Gary D said:

Although your pensions are not taxed in the Philippines

Correct. The Philippines has a dual tax arrangement with the UK so it accepts that your pension may have already been taxed. One thing you can do is get your pension paid directly into the Philippines from the UK. They will convert it into peso at the exchange rate at time of transfer or if you wish get it paid into a pound account in the Philippines then you can exchange it when you think the pound is high.

[not so old china hand]

4 hours ago, Snowy79 said:

Yes. I'm afraid any Government pension which includes your Police and State pension is added together. You then work out your annual tax allowance, remove that from your total pensions then anything over that you pay tax on. 

Currently the first £11,500 is tax free. You then pay 20% on anything over that up until £43,000. 

It's worth checking that HMRC have given you the correct tax code. In my experience they respond fairly promptly to queries.

[Richard Orme]

On 20/07/2017 at 3:57 PM, Dave Hounddriver said:

My mother gets a small state pension from the UK and only worked there for about 2 years before moving to Canada.  She was told she did not have to pay tax on it and that was true, in the UK, but the Canadian tax authorities got hold of the info and said that the income is added to her Canadian Income and if it puts her over the threshold of what she can earn in Canadian pensions then she has to pay Canadian tax on the UK pension.  Sorry I cannot add more info but hope that little snippet helps 

This is very true. She will have to pay the tax on the portion that takes her over the threshold. The UK and Canada do hold a double taxation scheme in place with each other, therefor if taxed in the UK, Canada will hold no liability on the tax.