When I retire to Thailand in the next couple of years, I will be heavily reliant upon my Pension to survive. Don't get me wrong, it will be more than enough to survive comfortably for the rest of my days (unless the UK Pound devalues, or the value of the Baht increases significantly). My current plan is to have the Pension paid in to a bank in the UK, and draw upon it as and when required, usually using an ATM.
I have read Pete's posting today, and it has got me thinking:
The United States is the only developed country that taxes its citizens while they are overseas, so people from Canada, Britain, Australia and New Zealand, among others, can often afford to work abroad for less
Does this mean that I would not have to pay UK Tax on my pension?
If it does, is my current cunning plan flawed ie am I leaving myself open by having my pension paid in to a UK Bank? Should I be looking at an offshore account?
This issue could make a tremendous difference to my pension, and I would be very grateful for any advice.
BB,
I havn't reached your "ripe old age" - yet.
But, I can't see how they can tax a pension, on which you've paid tax before. You'd be better to listen to people better in the know than me. Thought the point of saving for a pension was to benefit from tax incentives, whilst you were working, not be clobbered again after you retire?
Hi Big Boy; the Inland Revenue website at HMRC.GOV.UK has all the information on these matters. I don’t know if pensions are treated any differently from income, but generally if you register as having left the UK, you avoid income tax. You do this by filling in form P85; you can download a copy of this from the above website.
This is similar to a 401K plan in the States that a person contributes into from their salary. The proceeds are not taxed until after you retire on the assumption you will then be in a lower tax bracket. Works for most, but not a tax free retirement fund.
What we call Government Social Security, mandatory deduction from your salary your entire working life, is tax free, but limits your ability to earn over xxxx after you retire. If you do, these benefits are taxed also, even though they usually total less than about $2,000 per month per person on average.
And finally when you die, they tax you again on the entire F*&$#$g lot you have left as the USA has still not cancelled estate taxes. This is regardless of if you have already paid taxes on what you do have left.
I've also heard that both heaven and hell have an admission tax! Pete
Cor,
I knew there was a reason I left England at 39 years old.
Appreciate you're talking about National Insurance, as we know it in the UK.
There are many, many people now back home who's pension funds have gone belly up. Scottish Widows is one of the latest comedians who reckon they're not going to pay out to all and sundry.
I'm going back home soon and one of the business affairs is to take my Endowment Policy company to the Financial Ombudsman. Bring it on
At the end of the day, I don't owe anything. So, to crucify those money grabbing twats will give me a lot of satisfaction.
It'll probably take another couple of years, but again
And I have even got on to tax!!
My current plan is to have the Pension paid in to a bank in the UK, and draw upon it as and when required, usually using an ATM
You will also pay tax on any interest you get from having it paid into a UK bank.
OK, it might not be much, but it still wrankles me to think that when i make the move i will STILL be paying for others to soak the system, but, should i leave UK for more than 3 years and come back, i am not entitled to things like medical coverage by right !!!!!
Pookie
The views expressed here are my own.......and bloody good they are too !!!! :)
should i leave UK for more than 3 years and come back, i am not entitled to things like medical coverage by right !!!!!
Is this right?
Another part of my now crumbling cunning plan was that if any of us developed a serious disease such as Cancer, we would return to the UK at a rate of knots, and benefit from all of that National Insurance I've paid. I guess thats another re-think, or does it work a bit like visa renewals ie pop back to the UK for a quick holiday every 2 years and 11 months?
should i leave UK for more than 3 years and come back, i am not entitled to things like medical coverage by right !!!!!
Is this right?
Another part of my now crumbling cunning plan was that if any of us developed a serious disease such as Cancer, we would return to the UK at a rate of knots, and benefit from all of that National Insurance I've paid. I guess thats another re-think, or does it work a bit like visa renewals ie pop back to the UK for a quick holiday every 2 years and 11 months?
You can keep paying voluntary NI contributions, either full or part contributions. If you pay the full NI, you should be entitled to healthcare, automatically, should you need to return to the UK for it.
"The question is not, can they reason? Nor, can they talk? But, can they suffer?" - Jeremy Bentham, philosopher, 1748-1832
I retired 5 years ago and decided to keep my dosh offshore (Jersey). When I need money I just draw down.
The UK gave up sending me tax return forms as I'm taxed at source on my pension and I live overseas
Not 65 yet so I send a cheque to NIC annually. They are very good and remind me when it is due and also update me as to projected income at 65
RICHARD OF LOXLEY
It’s none of my business what people say and think of me. I am what I am and do what I do. I expect nothing and accept everything. It makes life so much easier.
Another part of my now crumbling cunning plan was that if any of us developed a serious disease such as Cancer, we would return to the UK at a rate of knots, and benefit from all of that National Insurance I've paid. I guess thats another re-think, or does it work a bit like visa renewals ie pop back to the UK for a quick holiday every 2 years and 11 months?
All you really need is an address to circumvent it though( but it pisses me off to have to do it)
A relative would do, i guess
Pookie
The views expressed here are my own.......and bloody good they are too !!!! :)
All income earned in UK regardless of whether you are non-resident for Tax purposes is Taxible. This includes pensions,salaries,rents, dividends paid into Uk Bank accounts. The only way to avoid Tax after becoming non-resident is to structure your income so that it is earned off-sure. You need to speak to your Pension/Financial advisor about this. Sadly even UK State Pension is Taxable if your Income in UK is over your allowance. You can avoid Taxation on this if the Pension is paid abroad, however, then you do not qualify for any Pension increases after you have moved the Pension offshore.
You also need to be aware that all property overseas is subject to UK death duties if you are a UK resident.
Oh well, its back to plan A - I'll have to continue paying tax on my pension! It does seem to be a shame that I've got to share my well earned reward for a hard life's work with the taxman, but deep down, I never really expected anything less. Pete did get my hopes up for a while.
Thanks to everybody for your help and useful advice - even though you gave me the wrong answers , it was appreciated.
All income earned in UK regardless of whether you are non-resident for Tax purposes is Taxible. This includes pensions,salaries,rents, dividends paid into Uk Bank accounts. The only way to avoid Tax after becoming non-resident is to structure your income so that it is earned off-sure. You need to speak to your Pension/Financial advisor about this. Sadly even UK State Pension is Taxable if your Income in UK is over your allowance. You can avoid Taxation on this if the Pension is paid abroad, however, then you do not qualify for any Pension increases after you have moved the Pension offshore.
You also need to be aware that all property overseas is subject to UK death duties if you are a UK resident.
I (respectfully) do not think the above statement is true. I believe your pension is not liable to tax if you declare you are not resident in the UK, however I may be wrong! I've been writing to the tax office for two years now to clarify this and all I've ever received back from them is template letters saying my case has been referred to a different office for further analysis! Two years I kid you not!
Pete
, it was appreciated.
