Tax on Widows Pension from UK

[Orac]

I have been asked to help out someone who has recently been widowed and is trying  to sort out  a private pension he had. The bulk of the legwork has already been done by her sister in law in the UK and the pension company have confirmed everything is ok from their side, however, there is a question regarding tax treatment since they are saying they are required to withhold 20% for Uk tax since she is not registered in the UK.

 

Can anyone confirm if this is correct or if she is entitled to a tax allowance if she could register.

 

many thanks

 

[cleopatra2]

I do not know the answer to your question.

However it may be worthwhile enquiring if application of Art 24 of the DTT non discrimination  would provide  the personnal allowance

Edited November 22, 2019 by cleopatra2

[steve187]

have a look at this - https://www.gov.uk/tax-uk-income-live-abroad/personal-allowance

and this

https://www.gov.uk/government/publications/income-tax-claim-to-personal-allowances-and-tax-repayment-by-an-individual-not-resident-in-the-uk-r43

Edited November 22, 2019 by steve187

[lungbing]

On first reading of this it seems to me that the widow in Thailand will have to pay tax and then reclaim it at the end of the year, for which she will probably need a UK bank account.  That seems a farcical way of doing things.  If she's eligible then they should not deduct the tax in the first place.

[Orac]

Thanks for those that replied.

 

Heard back from HMRC now and apparently she would normally be taxed at the UK personal tax rate (tax code 1250L applied). They have also sent a form DT-Individual to complete which would exempt the tax under the DTT but the catch is that it must be stamped by Thai Tax Office to confirm tax is being declared at this end which looks to actually be more than the UK tax.

[lungbing]

Only if you declared it this end after getting the  form signed.  And there's still the Thai personal allowance to be applied.

 

Please could you let us know from whom you received the reply so others can start the procedure.  I wrote to them via their  website and my communication has never been acknowledged nor replied to.