Wifey's UK widows pension when i ''Pop me clogs''- Anyone have any knowledge/experiences ?

[Pumpuynarak]

When i pop me clogs wifey will be entitled to a widows UK pension from my private company pension scheme. I have a letter from them detailing their requirements for her to claim but they will not detail any tax liability she will have, they just refer me to HMRC. Now as a Thai citizen who does'nt hold British citizenship and who has never lived or worked in the UK would she be liable to income tax on this pension. Also if she is liable to tax would she receive the personal allowance before the tax is applied ?

I've tried calling the HMRC but getting through to a useful person who can answer my query has proved difficult to say the least.

Her widows pension is not to be sniffed at as its currently 29K gross per year with annual rises of between 1-3%. It makes a massive difference to what she would receive each month if its not taxable/or if it is taxable would she receive the personal allowance before tax is calculated ?

Has anyone any experience/knowledge of this situation and can help me out ? TIA

Edited May 12, 2023 by Pumpuynarak

[Kwasaki]

I would say it will be taxed as stated on UK tax web site. 

There's a threshold on how much earnings or pension someone receive's before it's taxed. 

[cleopatra2]

If the pension is UK derived income then it is UK taxable. Your wife will be entitled to UK tax allowance .

The immediate issue would be obtaining a UK tax identifier  as your wife has not worked in the UK. 

[prakhonchai nick]

I have assisted many Thai widows with regard to former employer pensions.

Where  a pension payment is made from the UK it is eligible for tax.

As regards the personal tax allowance, strictly, according to the rules, she is not eligible. However ALL widows I have assisted have received this allowance. Anything over the current £12,750 is taxed, starting at 20%.

The former employer, making the pension payment, will arrange tax matters with HMRC. Initially there may be an emergency tax to be paid (up to 50%) but that will come back in the tax year following that in which it is paid.

A widow will need to make a claim from her husbands former employer, and send original death and marriage certificates + her birth certificate together with certified translations, plus bank details for payment. Anything more needed will be requested,

Invariably help will be required as most wives/widows are unable to communicate sufficiently in English, especially in writing.

[PPGuy]

This link, on whether or not a personal allowance is applicable, may be relevant. It appears to indicate that Thai nationals resident in Thailand, do qualify for the PA.

 

I would suggest that obtaining written confirmation from HMRC is preferable on all such matters. That can then be given to the pension provider as appropriate.

 

I had an issue with HMRC a few years back when I first received the state pension. I was given a tax calculation that omitted any PA. As I receive no other UK income I considered that was incorrect and contacted HMRC. Once they confirmed I was a British citizen they adjusted the tax return and included the full PA in a subsequent calculation which confirmed that no tax was to be deducted from my State pension.

 

https://taxresidenceguide.co.uk/individuals-entitled-to-the-uk-personal-allowance/#:~:text=The European Economic Area includes,%3B Slovenia%3B Spain%3B Sweden.  

[prakhonchai nick]

It is worth noting that some UK employer pension schemes  reduce the widows pension when the widow is 10/12 years younger than her husband. The usual reduction when applied, is 2.5% for each year over 10 or 12

[cleopatra2]

13 minutes ago, prakhonchai nick said:

I have assisted many Thai widows with regard to former employer pensions.

Where  a pension payment is made from the UK it is eligible for tax.

As regards the personal tax allowance, strictly, according to the rules, she is not eligible. However ALL widows I have assisted have received this allowance. Anything over the current £12,750 is taxed, starting at 20%.

The former employer, making the pension payment, will arrange tax matters with HMRC. Initially there may be an emergency tax to be paid (up to 50%) but that will come back in the tax year following that in which it is paid.

A widow will need to make a claim from her husbands former employer, and send original death and marriage certificates + her birth certificate together with certified translations, plus bank details for payment. Anything more needed will be requested,

Invariably help will be required as most wives/widows are unable to communicate sufficiently in English, especially in writing.

The UK personal allowance is provided for in the DTT non discrimination clause.. The non resident should receive the same benefits as residents.

[Pumpuynarak]

7 minutes ago, prakhonchai nick said:

It is worth noting that some UK employer pension schemes  reduce the widows pension when the widow is 10/12 years younger than her husband. The usual reduction when applied, is 2.5% for each year over 10 or 12

My wife is very fortunate that my private company pension provider pays her widows pension immediately on my death irrespective of her age. 

[cleopatra2]

7 minutes ago, Pumpuynarak said:

My wife is very fortunate that my private company pension provider pays her widows pension immediately on my death irrespective of her age. 

What the poster is referring to , is that some pension providers will further reduce the amount of monies paid to the widow if a certain age gap exists between the husband and wife. This is to account for the potential of the payment being paid for longer.

[hotandsticky]

38 minutes ago, prakhonchai nick said:

It is worth noting that some UK employer pension schemes  reduce the widows pension when the widow is 10/12 years younger than her husband. The usual reduction when applied, is 2.5% for each year over 10 or 12

 

 

I can confirm that my partner will suffer a reduction of 4 x 2.5% for our age difference of 19 years.

 

".Please note, we have spoken to the Scheme Trustees and they have advised that under the Scheme rules when you retired, if the surviving spouse/civil partner is more than 15 years younger, their pension will be reduced by 2.5% for each year that the age difference exceeds 15 years, subject to a maximum reduction of 50%"

 

. In my case my partner will receive 50% of my pension (prior to the lump sum payment) - less a reduction of 10% for the age difference;   She will receive 50% -10% = 45% 

[jaideedave]

17 minutes ago, prakhonchai nick said:

I have assisted many Thai widows with regard to former employer pensions.

Where  a pension payment is made from the UK it is eligible for tax.

As regards the personal tax allowance, strictly, according to the rules, she is not eligible. However ALL widows I have assisted have received this allowance. Anything over the current £12,750 is taxed, starting at 20%.

The former employer, making the pension payment, will arrange tax matters with HMRC. Initially there may be an emergency tax to be paid (up to 50%) but that will come back in the tax year following that in which it is paid.

A widow will need to make a claim from her husbands former employer, and send original death and marriage certificates + her birth certificate together with certified translations, plus bank details for payment. Anything more needed will be requested,

Invariably help will be required as most wives/widows are unable to communicate sufficiently in English, especially in writing.

Nick..A little off topic but I can see you as a valuable asset for the UK expats.I'm a Canadian with a similar issue.My Thai wife is entitled to 37.5% of one of my gov't pensions as a widow.I have downloaded all the necessary forms and filled out most of the details already including addressed envelopes..She's been instructed to have my death certificate etc translated and notarized.It would be next to impossible for her to complete this task on her own.In her case the Cdn gov't withholds a 25% non resident tax.I don't know any fellow Canucks to rely on to assist her. Do your UK contacts do the same? cheers 

[prakhonchai nick]

5 minutes ago, jaideedave said:

Nick..A little off topic but I can see you as a valuable asset for the UK expats.I'm a Canadian with a similar issue.My Thai wife is entitled to 37.5% of one of my gov't pensions as a widow.I have downloaded all the necessary forms and filled out most of the details already including addressed envelopes..She's been instructed to have my death certificate etc translated and notarized.It would be next to impossible for her to complete this task on her own.In her case the Cdn gov't withholds a 25% non resident tax.I don't know any fellow Canucks to rely on to assist her. Do your UK contacts do the same? cheers 

When the time comes, your wife, or someone on her behalf, who can write in English can claim the pension for her and forward all the necessary documents. Does not need to be a Canadian. The main thing is that whoever deals with your government pension understands what is required and can duly provide said requirements

[Chongalulu]

You have received sound advice from prakonchai which totally accord with my own previous research. The only addition I can make is on contacting my own provider to explain language barrier they were happy to have me lodge with them by email attachment copies of marriage certificate and her passport ID. One less job for her to do after the event.

[Hugh Jarse]

While you are alive.suggest you put this pension in a QROP. That way it’s outside of uk jurisdiction so no tax liability and the pot will remain intact. Many safe companies out there. I did this 15 years ago and no regrets, yet!

[keithkarmann]

5 hours ago, cleopatra2 said:

What the poster is referring to , is that some pension providers will further reduce the amount of monies paid to the widow if a certain age gap exists between the husband and wife. This is to account for the potential of the payment being paid for longer.

Some do not discriminate

against age.

[MikePBrown]

Re QROP - my understanding is that this was an EU regulation that the UK had to comply with and following Brexit this no long applies, also I understood the transfer of a pension pot to a QORP had to be done before the pension started paying out, i.e. before reaching pension age. If someone knows better please correct my understanding.

[prakhonchai nick]

15 hours ago, Hugh Jarse said:

While you are alive.suggest you put this pension in a QROP. That way it’s outside of uk jurisdiction so no tax liability and the pot will remain intact. Many safe companies out there. I did this 15 years ago and no regrets, yet!

Be very careful with QROPS, especially those controlled in Dubai!

[Pumpuynarak]

18 hours ago, cleopatra2 said:

What the poster is referring to , is that some pension providers will further reduce the amount of monies paid to the widow if a certain age gap exists between the husband and wife. This is to account for the potential of the payment being paid for longer.

My pension provider does not do this i'm glad to say.

[Andycoops]

In my experience in dealing with HMRC it's always best to correspond by the old fashioned letter.

It takes time but ultimately you get a response. 

Subsequently it pays to ensure you do things well in advance of any action being required.

[MartinL]

21 hours ago, cleopatra2 said:

The UK personal allowance is provided for in the DTT non discrimination clause.. The non resident should receive the same benefits as residents.

Just read the UK-Thailand Double Taxation Convention. The bits that are relevant to me, at least.

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/507424/uk-thailand-dtc180281_-_in_force.pdf

 

Article 24(4) seems to contradict your claim above. If my interpretation's wrong, I'd be very happy to be corrected.

Edited May 13, 2023 by MartinL

[billd766]

4 hours ago, Andycoops said:

In my experience in dealing with HMRC it's always best to correspond by the old fashioned letter.

It takes time but ultimately you get a response. 

Subsequently it pays to ensure you do things well in advance of any action being required.

I am 78 and at this point now.

 

If I can find an email address I would prefer to do it that way and perhaps follow it up with a snail mail.

[prakhonchai nick]

Whilst on the subject of widows and partners pensions, it is as well to be aware of the following, and perhaps investigate

 

Armed Forces Pensions will sometimes pay a reduced widows or partners pension when the marriage or partnership commenced after the initial retirement pension payment started.

 

Where a claim is made for a widow or partner,  I have come across a couple of cases where the relationship with widow or partner, needed to have been for a minimum 1 year to be able to claim. In one case 2 years were specified!

Providing evidence for a marriage is easy, but often not so for a partnership. I would strongly recommend to anyone with a partner to make a Will naming the partner as a beneficiary and showing the same address, opening a joint bank account, and where property is rented have a joint rental contract.  In 2 cases it took more than 1 year to convince 2 UK banks that a partnership existed.

[cleopatra2]

4 hours ago, MartinL said:

Just read the UK-Thailand Double Taxation Convention. The bits that are relevant to me, at least.

 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/507424/uk-thailand-dtc180281_-_in_force.pdf

 

Article 24(4) seems to contradict your claim above. If my interpretation's wrong, I'd be very happy to be corrected.

Here is the relevant paragraph

 

"(1) The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected."

 

If a Thai national subject to UK tax did not receive the personal allowance that nationals of the UK are entitled. The Thai national UK tax would be more burdensome.

 

In addition from the HMRC Thailand is on the following list 

 

https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm10340

Edited May 13, 2023 by cleopatra2

[billd766]

3 hours ago, cleopatra2 said:

Here is the relevant paragraph

 

"(1) The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected."

 

If a Thai national subject to UK tax did not receive the personal allowance that nationals of the UK are entitled. The Thai national UK tax would be more burdensome.

 

In addition from the HMRC Thailand is on the following list 

 

https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm10340

Thank you.

[Ginkas]

On 5/13/2023 at 12:39 PM, billd766 said:

I am 78 and at this point now.

 

If I can find an email address I would prefer to do it that way and perhaps follow it up with a snail mail.

Unfortunately, for the "Inland Revenue" side of HMRC there appears to be no email address.

There are plenty for various aspects of Customs and Excise taxes and other matters, but none for basic tax.

I searched long and hard but could not find one, I think it is deliberate.

 

However, if anybody has found an email address for this side of HMRC both billd766 and I would be grateful.

Someone who is paying too much tax on his lowly State Pension. 

[billd766]

2 hours ago, Ginkas said:

Unfortunately, for the "Inland Revenue" side of HMRC there appears to be no email address.

There are plenty for various aspects of Customs and Excise taxes and other matters, but none for basic tax.

I searched long and hard but could not find one, I think it is deliberate.

 

However, if anybody has found an email address for this side of HMRC both billd766 and I would be grateful.

Someone who is paying too much tax on his lowly State Pension. 

I am on a "hold" call to HMRC at the moment and have been for 12 minutes already.

 

I have gone around and around their www.gov.uk website until I am dizzy, and I still cannot find anything at all about how to contact them, and get them to answer about what happens to the tax on my other 2 pensions when I die.

 

I suppose it would be the same in Welsh.

 

There is AFAICS absolutely NO information if you live outside of the UK.

 

There must be thousands of expats worldwide who need this sort of information. 

 

HMRC NEEDS to set up a dedicated section for this complete with a larger call centre staff, a dedicated phone line and/or website.

 

The number that I called at HMRC bereavement is not HMRC bereavement.

 

He did give me a contact number +44 0300 200 3500 and then transferred the call. What a surprise i got choose the numbers and put on hold.

 

At this point I have been on this call for 30 minutes and 51 seconds.

[billd766]

17 minutes ago, billd766 said:

I am on a "hold" call to HMRC at the moment and have been for 12 minutes already.

 

I have gone around and around their www.gov.uk website until I am dizzy, and I still cannot find anything at all about how to contact them, and get them to answer about what happens to the tax on my other 2 pensions when I die.

 

I suppose it would be the same in Welsh.

 

There is AFAICS absolutely NO information if you live outside of the UK.

 

There must be thousands of expats worldwide who need this sort of information. 

 

HMRC NEEDS to set up a dedicated section for this complete with a larger call centre staff, a dedicated phone line and/or website.

 

The number that I called at HMRC bereavement is not HMRC bereavement.

 

He did give me a contact number +44 0300 200 3500 and then transferred the call. What a surprise i got choose the numbers and put on hold.

 

At this point I have been on this call for 30 minutes and 51 seconds.

 

[billd766]

I have just got through after 51 minutes 30 seconds.

 

The guy has taken my NI details, name address etc and put me back on hold.

 

He just came back and tells me he does not know and will find somebody who might know.

 

58 minutes and counting.

 

There is possibly a contact number at HMRC at +44 13 55 35 980 22.

 

1 hour and 9 minutes on the call.

 

It seems as though my wife will NOT pay UK income tax nor get the tax free allowance but she may have to pay tax in Thailand.

 

They will send me an email, hopefully explaining things, plus a copy of the dual taxation agreement.

 

Below seems to be the income tax thresholds for Thais living in Thailand

 

https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

 

Personal income tax (PIT) rates

The current PIT rates are shown below.

Net income (THB*)	PIT rate (%)
0 to 150,000	Exempt
150,001 to 300,000	5
300,001 to 500,000	10
500,001 to 750,000	15
750,001 to 1,000,000	20

 

 

 

 

[cleopatra2]

1 hour ago, billd766 said:

I have just got through after 51 minutes 30 seconds.

 

The guy has taken my NI details, name address etc and put me back on hold.

 

He just came back and tells me he does not know and will find somebody who might know.

 

58 minutes and counting.

 

There is possibly a contact number at HMRC at +44 13 55 35 980 22.

 

1 hour and 9 minutes on the call.

 

It seems as though my wife will NOT pay UK income tax nor get the tax free allowance but she may have to pay tax in Thailand.

 

They will send me an email, hopefully explaining things, plus a copy of the dual taxation agreement.

 

Below seems to be the income tax thresholds for Thais living in Thailand

 

https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

 

Personal income tax (PIT) rates

The current PIT rates are shown below.

Net income (THB*)	PIT rate (%)
0 to 150,000	Exempt
150,001 to 300,000	5
300,001 to 500,000	10
500,001 to 750,000	15
750,001 to 1,000,000	20

 

 

 

 

It would depend upon the specific pension.

If the pension is from a government pension then article 19 applies. Any spouse pension paid to a Thai national  residing in Thailand would not be UK taxable but subject to Thai tax 

[billd766]

19 minutes ago, cleopatra2 said:

It would depend upon the specific pension.

If the pension is from a government pension then article 19 applies. Any spouse pension paid to a Thai national  residing in Thailand would not be UK taxable but subject to Thai tax 

An interesting topic which I hope will run to a reasonable conclusion.

 

Having spent a lot of time swearing at my my mobile,  listening to the recording of "Your call is important to us".

 

If it is then get more call centre staff to answer the phones. Get dedicated numbers, emails, contact details etc. Train some staff to know what they are talking about and about what expats need.

 

IMHO I don't think that anybody really knows or cares about expats wherever they live, in the EU, offshore or even the dark side of the moon.

 

Other than to stop their pensions upon notification of the expats death.

 

I can remember many years ago that expats worldwide were given the death benefit of GBP 2,000 but no longer, though it can be obtained in the UK still.

 

BTW if anybody else tries to call the HMRC make sure that you visit the toilet first, or you may sit with your legs crossed for a long time waiting for the human response.