Uk Ex-pats Pensions

[MB1]

The tax is payable on a PERSONAL pension, not a state pension.

Incidentally, when my ex and I moved to Thailand we were assured by the tax authorities that we wouldn't have to pay tax on the pension as we lived in Thailand. They changed their mind once we moved here.....

The link I'm posting may tell you why your paying Tax on the UK pension whilst residing in Thailand and whether you qualify not to pay UK tax, but most income that comes from the UK will remain liable to UK tax.

If you do find that you have wrongly paid UK tax on your income then you could make a claim for repayment back to you.

HTH.

http://www.hmrc.gov.uk/cnr/faqs_general.htm#2nr

PS...I missed the point in your post 51 that it was a personal pension you were paying tax on..apologies.

Edited March 17, 2010 by MB1

[F1fanatic]

Thanks MB1, but I'm not arguing that tax is payable - I'm just querying why I'm continuing to pay tax (after a lifetime of doing so), and not eligible for any benefits!

As someone who never had children, earned above average etc. I get peed off when I'm screwed out of my pension too! Whilst I was working I never cared that I was paying for everyone else's kids, but I'm getting fed up now when I don't understand why my pension will be less than it would be in the UK.

In other words, I was always happy to pay for everyone else, but get v annoyed now when I'm being screwed again over my (paid for) pension.

[mistresserika]

This does seem to be the case. A classic example of the government screwing people out of the money they are entitled to.

Your "entitlement" ends the moment you leave UK airspace, and head for \a non EEC country, or a country that doesnt have a recipricol agreement with UK, unfortunatly

Penkoprod

Rubbish. UK expats still pay UK tax on pensions, so should also be entitled to pension cost of living rises.

[Penkoprod]

This does seem to be the case. A classic example of the government screwing people out of the money they are entitled to.

Your "entitlement" ends the moment you leave UK airspace, and head for \a non EEC country, or a country that doesnt have a recipricol agreement with UK, unfortunatly

Penkoprod

Rubbish. UK expats still pay UK tax on pensions, so should also be entitled to pension cost of living rises.

Well they arent, never have done, and now, never will be entitled to any cost of living rises, so saying its "rubbish" is both shallow sabre rattling for the sake of it and showing naive ignorance on your part.

There are plenty of references to where the government has stated time and time again the fact about pension increase entitlement. Are you not able to see them, or did you just choose to ignore them, for the sake of a good rant? They are on this very thread if you take the time to look for them.

Penkoprod

[Brigante7]

Guess that every few years I will go back for an extended visit of 6 months to visit what family I have back in the UK and get an increase to my pension.

Or just do what some ex-pats do and keep an adress in the UK be it a friend or relative and have the money paid in to a UK bank.

Brigante7.

[PattayaParent]

It's pretty fair that as there is no link between NI contributions and the retirement pension my pension should be frozen at the rate I start to draw it, not quite why they say that I must have so many years of contributions before I can receive a pension in that case?

The court agreed that the expats made no contribution to the UK economy, apart from the tax I pay on my occupational pension, and has been pointed out by other posters us expats are not a drain on other resources such as NHS, heating allowances and the like, all seems a bit one sided to me.

The pensioners alliance think public opinion might be in our favour, I seriously doubt it, I think the majority of Brits don't give a stuff, they think we are all relaxing on the beach sipping cocktails all day.

So whats next, the government has to make some serious savings so maybe they will eventually refuse to pay pensions to anybody not living in the UK.

What about Class 3 Voluntary Contributions?

As far as I am aware the only entitlement from paying these contributions is pension?

So there is a direct link between NI contributions and pension in this case?

[yabaaaa]

<br />What happens if I go to France on a ferry then fly from Paris to Bangkok? As far as the Uk knows Im "in France" or have they linked all the European computers together yet?<br />

<br /><br /><br />

If you aint in the County you are not entitled to it. I expect you are claiming cold allowance also?

I think it fair and just, if you are in the Country then you are entitled and can spend it in Blightey.

Not correct I think I am entitled to it in the EU?

Your'e expecting a lot Im 46 and dont receive any pensions yet

Edited March 22, 2010 by yabaaaa

[apetley]

'What is morally wrong cannot be economically right.'

Quote from a speech by the Rt Hon Gordon Brown MP.

[Ricardo]

I realise I'm being v simplistic, but I genuinely don't understand how we can be paying tax on our private pensions, but not entitled to NHS care, increases on basic pension (once payable) etc.

Why the hel_l are we paying tax??

If you're paying UK Income-Tax on a UK-based private-pension, despite being UK-non-resident, have you considered using a QROPS to move it off-shore, and reduce your income arising inside the UK to below your personal-allowance ?

Presumably you've also got your bank-accounts off-shore, so that any interest-arising (hah ! as if !!) is also not taxable.

And any other stocks/shares/investments are held in a tax-efficient way ?

[astral]

While it's true that expats don't spend their pension in the UK, it's also true that they aren't costing the NHS

huge sums to treat them for age related illness. As the vast majority of NHS patients are elderly, and the cost to the NHS considerably outweighs the cost of the pensions, it would actually SAVE the country money if it used any inducement to have pensioners emmigrate to countries where they have to pay their own health care costs, including annual increases. Can you imagine the chaos that would ensue if all the current expats were to return to the UK, demanding council housing and "free" NHS treatment for multiple diseases?

Exactly, it would be chaos.

My recent cancer treatment ran up a bill of $60,000

paid by my health insurance, not the NHS

[Bagwan]

<snip>

I guess the reason they threw this claim out was because there's no chance of getting votes from us non-EU expats.

Exactly - we aren't going to return to the UK to go on a demo, are we? I said on one of the Pension Groups that we need to be more pro-active. Sod the courts, get everyone eligible to vote on to the register and make it public that we would vote for any party that promises to end this discrimination.

But this group is run - as would be expected - by old geezers who can't be bothered with all that radical stuff. They'd much rather waste their time writing to their MPs.

Since you live abroad you have no MP. Or vote. Hence no comeback on the Government.

I think there may well be an increase in peeps not letting their current whereabouts be known. If you can arrange to retain a UK address where no other social security claimant lives, you will probably get away with it. I hope that the relevant Government department doesn't check out Official Census returns.

[gregchambers]

The state pension is paid free of tax because the personal allowance covers it - there is nothing to stop the government deciding non-residents should not be allowed a personal allowance and taking twenty percent tax off the state pension at source - and they would probably do if faced with the bill for giving everyone their full pension.

Private pensions are taxed in the UK because the contrubutions have been made free of tax, so IR wants some of that money back.

However, there is nothing to stop someone living in Thailand going to the thai authorities, which have a double taxation treatment with the UK, and getting them to claim it back - not sure whether Thailand would then tax it at local rates or at nil-rate if it is considered offshore income.

Whilst the UK collects various NI contributions it has never separated that money off and kept it as an investment fund for future pensions and it is likely the only way the country will survive in the future is by raising the retirement age to 70-75 and maybe even requiring prior and on-going residence to collect it. Things will probably get very nasty post election as there is neither any money left nor any inclination of existing tax-payers to pay more tax.

[Bagwan]

MB1 - you're avoiding the point I'm making.

The personal pension I'm paid IS TAXED IN THE UK.

Bearing this in mind, what am I paying for??

When, one day, I get the state pension - I've paid for it throughout my working life. I feel I deserve the same deal as those choosing to stay in the UK having contributed throughout my working life, and having paid in taxes FAR more than I ever received in benefits (never having children).

My understanding is that because I didn't pay tax on the contributions to my pension fund, I get taxed on the proceeds. Can't have it both ways.

What I don't understand is the reciprocal agreement bit. What has Thai pensions got to do with UK pensions?

I am reminded of a phrase I often heard in my Navy days. Delivered in Churchillian tones it went, "If ever the country was overrun by the enemy, The Royal Family and your Government will &lt;deleted&gt; off to Canada". A literal translation would be "&lt;deleted&gt; you Jack, I'm inboard."

[Penkoprod]

The state pension is paid free of tax because the personal allowance covers it - there is nothing to stop the government deciding non-residents should not be allowed a personal allowance and taking twenty percent tax off the state pension at source - and they would probably do if faced with the bill for giving everyone their full pension.

Private pensions are taxed in the UK because the contrubutions have been made free of tax, so IR wants some of that money back.

However, there is nothing to stop someone living in Thailand going to the thai authorities, which have a double taxation treatment with the UK, and getting them to claim it back - not sure whether Thailand would then tax it at local rates or at nil-rate if it is considered offshore income.

Whilst the UK collects various NI contributions it has never separated that money off and kept it as an investment fund for future pensions and it is likely the only way the country will survive in the future is by raising the retirement age to 70-75 and maybe even requiring prior and on-going residence to collect it. Things will probably get very nasty post election as there is neither any money left nor any inclination of existing tax-payers to pay more tax.

Thats exactly right, and i've been saying as much on here.........but all people want to do is rant about how unfair they think it all is (for all the good that it will do them !!! )

And, as for all this talk about what would happen if "we all turned up back in UK to "claim" our free housing, and so on"...... Truth be told, no one has to give returning expats the steam off their piss..........let alone any kind of benefit, or support. Not that its a question of fair, or unfair but thats how its set up to be.

Welcome to the real world..now live with it

Penkoprod

[PhilHarries]

Welcome to the real world..now live with it

Penkoprod

Yep, and I hope the dreamers aren't living in hope of dear David Cameroon getting in and changing things. When you view them all, the political parties that is, in the cold grey light of dawn there's no difference.

It's heads you lose and tails they win.............oh and they'll have that coin now you're done with it.

[MB1]

The state pension is paid free of tax because the personal allowance covers it - there is nothing to stop the government deciding non-residents should not be allowed a personal allowance and taking twenty percent tax off the state pension at source - and they would probably do if faced with the bill for giving everyone their full pension.

Private pensions are taxed in the UK because the contrubutions have been made free of tax, so IR wants some of that money back.

However, there is nothing to stop someone living in Thailand going to the thai authorities, which have a double taxation treatment with the UK, and getting them to claim it back - not sure whether Thailand would then tax it at local rates or at nil-rate if it is considered offshore income.

Whilst the UK collects various NI contributions it has never separated that money off and kept it as an investment fund for future pensions and it is likely the only way the country will survive in the future is by raising the retirement age to 70-75 and maybe even requiring prior and on-going residence to collect it. Things will probably get very nasty post election as there is neither any money left nor any inclination of existing tax-payers to pay more tax.

Thats exactly right, and i've been saying as much on here.........but all people want to do is rant about how unfair they think it all is (for all the good that it will do them !!! )

And, as for all this talk about what would happen if "we all turned up back in UK to "claim" our free housing, and so on"...... Truth be told, no one has to give returning expats the steam off their piss..........let alone any kind of benefit, or support. Not that its a question of fair, or unfair but thats how its set up to be.

Welcome to the real world..now live with it

Penkoprod

The way I see IMO, it is that certain expat pensioners don't give a flying duck about the UK or it's economy, they just want to receive as much as they can from it whilst they live elsewhere in another country, from some of the posts on here some even think it's ok to claim frauduently whilst living abroad at the expense of the UK tax payer.

I for one hope their caught and get their just rewards..

Edited March 22, 2010 by MB1

[Penkoprod]

Welcome to the real world..now live with it

Penkoprod

Yep, and I hope the dreamers aren't living in hope of dear David Cameroon getting in and changing things. When you view them all, the political parties that is, in the cold grey light of dawn there's no difference.

It's heads you lose and tails they win.............oh and they'll have that coin now you're done with it.

Until such times as people stop treating the political parties like a football league, and their blind support for "their team" is unconditional, there will never be the chance of change.

For too long, now, we have had career polititians raping the country, and their policies (like you say) .....well, lets just say you cant get a ciggy paper between them.

Penkoprod

[Penkoprod]

The way I see IMO, it is that certain expat pensioners don't give a flying duck about the UK or it's economy, they just want to receive as much as they can from it whilst they live elsewhere in another country, from some of the posts on here some even think it's ok to claim frauduently whilst living abroad at the expense of the UK tax payer.

I for one hope their caught and get their just rewards..

And i bet those eyes you see it with are those of a UK taxpayer, still IN the UK?????

Penkoprod

[MB1]

The way I see IMO, it is that certain expat pensioners don't give a flying duck about the UK or it's economy, they just want to receive as much as they can from it whilst they live elsewhere in another country, from some of the posts on here some even think it's ok to claim frauduently whilst living abroad at the expense of the UK tax payer.

I for one hope their caught and get their just rewards..

And i bet those eyes you see it with are those of a UK taxpayer, still IN the UK?????

Penkoprod

Ahhh your crystal ball is working Pen, yes I am in the UK, work in the UK and pay my taxes to the UK, I try to travel to Thailand 3 to 5 times a year, staying for no longer than a month at a time, though for the foreseeable future I'll have to downsize to 2 weeks at a time due to work.

I'm not at the stage in life yet where I'm ready for retirement but in the future if things go well and I'm able to retire abroad then I may do so, but I won't be sponging off the UK and neither would I expect the taxpayer to fund my life abroad.

[Penkoprod]

Ahhh your crystal ball is working Pen, yes I am in the UK, work in the UK and pay my taxes to the UK, I try to travel to Thailand 3 to 5 times a year, staying for no longer than a month at a time, though for the foreseeable future I'll have to downsize to 2 weeks at a time due to work.

I'm not at the stage in life yet where I'm ready for retirement but in the future if things go well and I'm able to retire abroad then I may do so, but I won't be sponging off the UK and neither would I expect the taxpayer to fund my life abroad.

Firstly, i aint saying you are right in your view, and i aint saying you are wrong.

BUT..........yours is the view of the majority of taxpayers in the UK at the moment, backed up by legislation made and followed by government after government from the time of the introduction of the NI scheme all those years ago. And all the ranters and ravers... all the "angry of Ayudhya" or "baffled of Bangkok" and "cheesed off of Chonburi" better get used to it, instead of bleating and belly-aching about it.

One thing, though........are you saying you wont be taking any State Pension when it becomes due?

Because this whole pensions deal is a "pay as you go" deal. You DO know that, dont you? In other words, those contributions and taxes you are making now will be all spent on todays pensioners needs and entitlements, amongst other things, and YOUR needs and entitlements will be funded by the "MB1s" of tomorrow, as it were.

Penkoprod

[MB1]

Ahhh your crystal ball is working Pen, yes I am in the UK, work in the UK and pay my taxes to the UK, I try to travel to Thailand 3 to 5 times a year, staying for no longer than a month at a time, though for the foreseeable future I'll have to downsize to 2 weeks at a time due to work.

I'm not at the stage in life yet where I'm ready for retirement but in the future if things go well and I'm able to retire abroad then I may do so, but I won't be sponging off the UK and neither would I expect the taxpayer to fund my life abroad.

Firstly, i aint saying you are right in your view, and i aint saying you are wrong.

BUT..........yours is the view of the majority of taxpayers in the UK at the moment, backed up by legislation made and followed by government after government from the time of the introduction of the NI scheme all those years ago. And all the ranters and ravers... all the "angry of Ayudhya" or "baffled of Bangkok" and "cheesed off of Chonburi" better get used to it, instead of bleating and belly-aching about it.

One thing, though........are you saying you wont be taking any State Pension when it becomes due?

Because this whole pensions deal is a "pay as you go" deal. You DO know that, dont you? In other words, those contributions and taxes you are making now will be all spent on todays pensioners needs and entitlements, amongst other things, and YOUR needs and entitlements will be funded by the "MB1s" of tomorrow, as it were.

Penkoprod

No I'm not saying that I won't be taking any state pension when I reach whatever the required age is to receive it (it could be 70 0r 75 by the time I retire) , I'll just take whatever my entitlement is as the rules apply when the time arrives, but as you put it, I won't be "bleating and belly-aching" about the rules of the reciprocal agreement as I'm fully aware of the rules as they are now and if I did retire to Thailand I'm fully aware that my state pension would be frozen from the date I left the UK.

Here's a thought though, I wonder if there will be any money in the pot to pay UK state pensions in the future, it may just become a reality that there is no such thing as a state pension in the future and any money that pensioners receive will be a means tested form of social security only available to pensioners who reside in the UK.

Edited March 22, 2010 by MB1

[astral]

What I don't understand is the reciprocal agreement bit. What has Thai pensions got to do with UK pensions?

There is a dual tax agreement between the UK and Thailand, so that tax paid on a pension in the UK can be offset

against tax in Thailand.

I am not sure the Thai authorities would go so far as to give you a refund??

BTW this applies to any income from the UK.

Particularly important for those married people using overseas income to justify a visa extension based on marriage.

You are liable for tax in Thailand if present for more than 180 days in a calendar year.

The dual tax agreement means you need not pay tax again on taxed income from the UK.

I had this arguement with my Thai tax office.

They were not happy, but had to accept my tax statements from the UK

[Gambles]

What I don't understand is the reciprocal agreement bit. What has Thai pensions got to do with UK pensions?

There is a dual tax agreement between the UK and Thailand, so that tax paid on a pension in the UK can be offset

against tax in Thailand.

I am not sure the Thai authorities would go so far as to give you a refund??

BTW this applies to any income from the UK.

Particularly important for those married people using overseas income to justify a visa extension based on marriage.

You are liable for tax in Thailand if present for more than 180 days in a calendar year.

The dual tax agreement means you need not pay tax again on taxed income from the UK.

I had this arguement with my Thai tax office.

They were not happy, but had to accept my tax statements from the UK

Reciprocal pensions agreements and DTAs are 2 totally different things.

What Astral is saying is to do with tax liability under the DTA - it only applies to incoem specified in the DTA and it is this DTA that helps to enable personal or occupation pensions that have been transferred overseas to be received tax-free in Thailand. For many people that may well be a much bigger benefit than non-indexation of state pension.

Most DTAs make provision for a tax credit (i.e. to avoid double payment of tax) and not for e.g. Thai Revenue Dept to issue a refund because of tax paid in the UK.

I mentioned in a couple of other threads that a UK tax & pensions expert will be coming here to speak on these topics on Wednesday - PM me of you want any details about this.

However the key things for this thread are probably

indexation fight now seems lost

non-residents are not guaranteed state medical care on UK visits

transferring personal/occupation pensions out of the UK should be considered/reviewed by virtually all pension holders

UK residence/non-residence arrangements need to be totally reviewed post the recent Gaines-Cooper ruling - your UK tax bill may be higher than you'd realized!

cheers,

Paul

[Faramond]

It's pretty fair that as there is no link between NI contributions and the retirement pension my pension should be frozen at the rate I start to draw it, not quite why they say that I must have so many years of contributions before I can receive a pension in that case?

The court agreed that the expats made no contribution to the UK economy, apart from the £500 a month tax I pay on my occupational pension, and has been pointed out by other posters us expats are not a drain on other resources such as NHS, heating allowances and the like, all seems a bit one sided to me.

The pensioners alliance think public opinion might be in our favour, I seriously doubt it, I think the majority of Brits don't give a stuff, they think we are all relaxing on the beach sipping cocktails all day.

So whats next, the government has to make some serious savings so maybe they will eventually refuse to pay pensions to anybody not living in the UK.

500 a month tax ??

That would break my heart. I've read a few of your posts over the years, and you seem an decent, intelligent fellow, sorry to read you have to pay this much.

Thats a lot, why dont you look into moving the occupational pension offshore and you can take the income tax free. As long as you havent purchased annuity this can be done

[Gambles]

It's pretty fair that as there is no link between NI contributions and the retirement pension my pension should be frozen at the rate I start to draw it, not quite why they say that I must have so many years of contributions before I can receive a pension in that case?

The court agreed that the expats made no contribution to the UK economy, apart from the £500 a month tax I pay on my occupational pension, and has been pointed out by other posters us expats are not a drain on other resources such as NHS, heating allowances and the like, all seems a bit one sided to me.

The pensioners alliance think public opinion might be in our favour, I seriously doubt it, I think the majority of Brits don't give a stuff, they think we are all relaxing on the beach sipping cocktails all day.

So whats next, the government has to make some serious savings so maybe they will eventually refuse to pay pensions to anybody not living in the UK.

500 a month tax ??

That would break my heart. I've read a few of your posts over the years, and you seem an decent, intelligent fellow, sorry to read you have to pay this much.

Thats a lot, why dont you look into moving the occupational pension offshore and you can take the income tax free. As long as you havent purchased annuity this can be done

Occupational pension wouldn't normally be annuity purchase so should be transferable any time. I've been involved in a lot of work on this...

[JohnLeech]

Exactly what I expected from the European Court, a lefty organization obsessed with giving positive judgements to PC causes.

I was demobed from the army in 1971, but because I only served 11 years I don't get a penny pension from the MOD. If I'd stayed on till after 75 (we didn't know this at the time) then all the time served would have been pensionable. Even people serving half the time I did get a pension if they were demobed after '75. I'm a member of an association of ex-servicemen who took this to the European Court, but of course we lost.

Of course you lost.

The judgement had nothing to do with discrimination against the military or the military per se - it was simply that the Guaranteed Mnimum Pension (GMP) was not to be funded or paid retrospectively by the State Eanings Related Pensions Scheme (SERPS) or anyone contracted out of the scheme, as the Armed Forces Pension Schme (AFPS) was. How could you or anyone else have known in 1971 what Social Security Acts would be passed 4 years later - you make it sound as if you were deliberately misled. You are, in any case, confusing the GMP, AFPS and SERPS, and although these were a result of the Social Security Pensions Act 1975 they only applied to those retiring from the Armed Forces after 5 April 1978.

[smokie36]

Here's a thought though, I wonder if there will be any money in the pot to pay UK state pensions in the future, it may just become a reality that there is no such thing as a state pension in the future and any money that pensioners receive will be a means tested form of social security only available to pensioners who reside in the UK.

Things aint too rosy for pensioners in the UK now and I don't expect it to improve with an increasing number of people reaching pensionable age and living for longer as well. As said before the age limit will rise to 70 or more leaving many people especially those retiring abroad at say 50-55 and hoping to eke out their cash until retirement age sitting high and dry. Unfortunately each successive government will just keep moving the goalposts.

[Faramond]

The tax is payable on a PERSONAL pension, not a state pension.

Incidentally, when my ex and I moved to Thailand we were assured by the tax authorities that we wouldn't have to pay tax on the pension as we lived in Thailand. They changed their mind once we moved here.....

Hi F1, You can move of your personal pensions offshore into a QROPS scheme you can take the income tax free, also added benefits of not having to purchase annuity and having the ability to pass on the pension to next of kin tax free if anything was to happened to you

I advise a lot of people here in Bangkok on QROPS, if you need any info just message me

[smokie36]

Is there a light on the horizon, as today, the Labour government PROMISED to bring UK pensions in line with average earnings by 2012.

Yes this government could also promise to abolish Income Tax and give everyone a free £100000 lump sum and they will still lose the next General Election.

[Chalky]

"Paying contributions has never given an automatic entitlement to benefits. The

national insurance scheme is different from a commercial insurance scheme in which

premiums are linked to expected benefits. Although national insurance contributions

provide a foundation for calculating personal future benefit entitlement, the

contributions do not actually pay for those benefits.

The agreement between the individual and the state is that the payment of

contributions gives entitlement to a package of benefits subject to certain conditions.

One condition is that retirement pension upratings are generally not payable abroad.

That comes from the 1955 legislation, which provided for pensions to be paid abroad,

but not for uprating.

The rate of national insurance contributions has never included an element for the

indexation of pensions payable abroad, because the social security scheme is

designed primarily for those living in the United Kingdom, and any uprating in the

pension is designed to meet the cost of living here."

Great link, says it all.

Told the missus we're off to the Phillipines when I get my full military pension aged 55 and I think we may just have a second home here but will have to look at Thai/Phillipines residency for tax laws.