Tax on a UK Company Pension

[Huahinian]

A government pension scheme (eg NHS pension) can only be paid into a UK bank account although you can reclaim tax after a period of 4 years abroad if you are in the UK for less that 90 days (averaged over the previous 4 years I believe.

Not quite true! I receive a cheque monthly and pay it into my Thai bank. It does take 30/45 days to clear though.

[margaretcarnes]

littlebird wrote

A government pension scheme (eg NHS pension) can only be paid into a UK bank account although you can reclaim tax after a period of 4 years abroad if you are in the UK for less that 90 days (averaged over the previous 4 years I believe

Taken from the HMRC site

Pensions paid for former service to the UK Government are known as Government Service Pensions. Pensions paid for former employment with the H M Forces, Civil Service and Foreign and Commonwealth Office are all regarded as Government Service Pensions.

If you are still unsure you should contact us giving the name of your former employment and the payer of your pension.

Usually Government Service and Local Authority Service Pensions paid to British nationals living overseas remain taxable in the UK. You will still be eligible to receive full UK Personal Allowances and reliefs.

The main exceptions are Australia, Canada, New Zealand and Cyprus where exemption for Government Service and Local Authority Service Pensions can be claimed.

If an individual is a national of and resident in an overseas country, exemption under a Double Taxation Agreement may also be due for a Government or Local Authority Service Pension

Unless the system has changed in the last 4 years, and has not been published, government pensions remain taxable in the UK

As far as I'm aware the system hasn't changed. 2 points here - first the tax offices for both UK state pensions and UK based occupational/private pensions are based in the UK. Those offices issue the tax codes. HMRC collect at source.
Second - contrary to what Littlebird has stated UK Government Pensions can be paid by cheque posted abroad. (Unless this has changed recently - but my civil service pension was never a problem paid in this way to Thailand.)
Banking the cheques in Thailand can result in excessive clearance times, but Bangkok Bank was never a problem and would clear any UK government cheque immediately - worth asking.

That UK.gov website can be useful by the way - but shouldn't be taken as gospel because there are far too many 'what ifs' which it can't address in the space. It does however provide the list of countries - such as Thailand - which do not have reciprocal arrangements with the UK regarding annual state pension increases.

[Governor]

Mags, you are course correct in saying that Civil Service Pensions can be paid overseas but Capita will now pay it directly into a Thai bank, negating the need for any cheque clearance delays, it's paid into the local bank on the due date, or even the day before. The only downside of this is that Capita will not pay Stirling into a Thai bank but purchase Baht in the UK and transfer that, and whilst the rate is not too bad I do lose in the region of 1.75 Baht in the Pound. I am in the process of opening a Nationwide account in the IOM, I can do it from Thailand, my pension will be paid into that and I can transfer Stirling as and when at twenty quid a pop and still be better off, more so next year when I reach State Pension age, though they will also pay your State Pension into a Thai bank.

As you say, State pension is frozen for those living in Thailand, but my Civil Service Pension is uprated, though I wait with baited breath to see if Lord Hutton has anything to say on this front.

As has been pointed out, Civil Service and State Pensions are taxed in the UK, I confirmed this at my tax office when I was in the UK recently as I had been advised differently.

[Big Boy]

I am in the process of opening a Nationwide account in the IOM, I can do it from Thailand, my pension will be paid into that and I can transfer Stirling as and when at twenty quid a pop and still be better off,

That is one of my unanswered questions for my forthcoming retirement Governor. How easy is it to arrange a transfer from an English to a Thai bank when you are situated in Thailand please?

[Governor]

That is one of my unanswered questions for my forthcoming retirement Governor. How easy is it to arrange a transfer from an English to a Thai bank when you are situated in Thailand please?

Seems pretty straightforward, you can nominate a Thai bank when you open the account and then can arrange the transfers online.

Of course to open an account with them you have to send them certified copies of everything, though if you visit the UK they will do it for you in one of their branches fro free.

http://www.nationwideinternational.com/

[lindosfan1]

My pensions are paid into my UK account with Lloyds, I rang their international transfer office every 3 months got what I needed transferred over in pounds to my Thai bank account. Cost 20 pounds.
You can transfer up to 5000 pounds at a time. Tme cost is the same no matter what you transfer, Therefore leave it in your English account getting what ever interest they pay.
You can save quite a bit by not transferring monthly.

[Big Boy]

Thanks guys

[margaretcarnes]

Thanks for the Capita update Gov! At last they have got their act together (albeit still not ideal.) And by the way you're not alone - I haven't heard from them yet either!
But re online banking and transfers - I haven't tried doing it - don't have a Thai account these days - but surely an online transfer can be made from say Lloyds to a Thai account? If so it seems the way to go for many expats.

[Governor]

I have just read the Hutton report, all 215 pages of it, and whilst it doesn't affect me it will certainly affect those who are a fair way off their retirement.

I fully accept that something needed to be done, though as those former Civil Servants amongst us will now, the scheme had already been reviewed and 'downsized', but I'm glad that Hutton and his team have finally put the myth of 'Gold Plated Pensions' to rest.

There are some difficult times ahead for Civil Servants still in harness, I think that the two most important recomendations are the raising of the retirement age, which I presume will alter the way pension years are calculated, be it 60ths or 80ths, and the career average, as a late 'high flyer' that would have knocked about ten grand off my pension, if my back of a fag packet calculations are correct.

[Big Boy]

I'm pleased to report that I should have escaped before the report kicks in.

The word around the office though is that the report is shooting itself in the foot. In these times of looking for people to leave quickly, the fact that it is unlikely to be implemented until 2014 (as opposed to next year) at the earliest means many who would have left next year, will now hang on a bit longer.

[caller]

As a local Govt. employee who pays 322 uk gbp per month towards their personal, perceived as being, 'free' pension, I have steadfastly refused to look at anything that has been printed about this, as I currently feel like a leper (apologies) simply for being in the public service, with all the rhetoric that's been going on, but the above couple of posts are quite reassuring, for me. Thanks.

[margaretcarnes]

I have just read the Hutton report, all 215 pages of it, and whilst it doesn't affect me it will certainly affect those who are a fair way off their retirement.

I fully accept that something needed to be done, though as those former Civil Servants amongst us will now, the scheme had already been reviewed and 'downsized', but I'm glad that Hutton and his team have finally put the myth of 'Gold Plated Pensions' to rest.

There are some difficult times ahead for Civil Servants still in harness, I think that the two most important recomendations are the raising of the retirement age, which I presume will alter the way pension years are calculated, be it 60ths or 80ths, and the career average, as a late 'high flyer' that would have knocked about ten grand off my pension, if my back of a fag packet calculations are correct.

Excellent point there Gov about the method of calculation - 60ths/80ths etc. Something that hadn't occured to me (and I wish it hadn't now - too brain draining!)
But in reality many Civil Servants now are employed on a short term non renewable contract basis, at least at lower grades. They will probably never qualify for CS pensions anyway - something the government chooses to ignore. In fact the concept of 'career civil servant' has been dying out since the 90's.

[lindosfan1]

Margaret
I agree online transfers between account would be good, Ok if both banks are in the uk. But not to bamks in Thailand or Greece where I am at the moment.
I believe the problem is the UK uses sort codes and Thai and Greek banks use swift codes. I do my UK banking on line and have tried to do it not possible.
One of the other reasons may be money laudering it would make it simple.

[richard]

Margaret
I agree online transfers between account would be good, Ok if both banks are in the uk. But not to bamks in Thailand or Greece where I am at the moment.
I believe the problem is the UK uses sort codes and Thai and Greek banks use swift codes. I do my UK banking on line and have tried to do it not possible.
One of the other reasons may be money laudering it would make it simple.

Am I missing something?

My state pension and private pensions are paid into my UK HSBC account

I either use a debit card here in Thailand or orchestrate a transfer from HSBC (UK) to Bangkok bank here in HH. The transfer is usually 24 to 48 hours.

All HSBC need is the BK bank swift code and away you go

[lindosfan1]

Online transfers your do yourself via the computor. You do the transfer yourself. I presume you phone your babk up or have a standing order to transfer. Debit cards are not online transfers.
If you read my earlier post I transferred from lloyds like that.