Rob_01

Hello, I'm a new member and am seriously considering retiring to the Philippines in a few years. I have read quite a few threads but cannot get a clear answer to my question. I would really appreciate it if someone could clarify whether or not my military pension would be taxed by both the UK and Philippine Governments if I moved to the Philippines. If so, what would be the impact ?

Regards

Rob

Gazza-d

Pensions in the Philippines are taxed at 0%. There is a dual taxation arrangement between the UK and the Philippines so you will only ever pay tax in one country.

Rob_01

Hi Gazza-d, thank you for your reply but are you sure. I've read the Double Taxation Treaty and it gave me the impression that Government Pensions were not included in the treaty. This is why I am so confused as I keep getting told different things.

quiltman

All UK government pensions are specifically EXCLUDED from the double taxation treaty and are therefore taxed by HMRC.(There are only a couple of countries - USA is one- where the double taxation treaty allows you to claim State & government pensions tax free , but you have to be registered for tax there and have confirmation from the local tax authorities)
your UK State Pension cannot ,by law, have tax deducted by HMRC so they total your UK income - STate, government and any PRIVATE pensions, apply the tax free allowance and deduct any tax due from ,usually, your government pension.
Now, generally - there are a couple of minor exemptions, but do not affect UK citizens - PRIVATE pensions can be remitted here tax free but in order to obtain the relief you have to be registered for tax here and then apply to HMRC for the exemption from UK tax.
For example, I have my State pension and a couple of smallish private pensions. As my state pension is over the tax free allowance, HMRC take the tax due from the largest of my private pensions. As the holder of a retirement visa (SRRV) I get an exemption from tax on all pensions remitted here, so can get my private pensions tax free, but still pay UK tax on my State pension, deducted from one of the private pensions.
In my wifes case, she has a teachers pension and her State pension. She CANNOT claim any exemption as her Teachers pension is a Government pension so is excluded from the double taxation treaty, and HMRC take her tax due from her teachers pension.

so, in summary, you will pay UK tax on your Military pension but no further tax here, once you draw your state pension, this is added to your military pension for total income and any tax due deducted from your military pension and no further tax is due here.
The good news is that you will still get any state pension increase here due to the separate social Security Agreement between UK and Philippines!

If you need more info then please PM me.

quiltman

Oh, here's the link to the DT treaty;
https://www.gov.uk/government/public...with-uk-income

mikemike

Should you still be concerned then do what many of us do.

open a BPI account in Uk and one here, Have your pensions paid to the UK bpi and then transfer on line what you need this is a savings transfer not taxable here or assessed here.

once set up it is very easy and fast and compared to many uk high st banks the transfer fees are very cheap and an enhanced rate of exchange

quiltman

Agree entirely with mikemike.
works very easily.
www.bpieuropeplc.com

They'll open a peso account for you here , before you arrive!

Gazza-d

I believe you can also get your state pension paid by the Philippine government which would remove it from your UK tax allowence.

quiltman

you can certainly get your pensions paid direct into a Philippine bank account, but why would the Philippine government pay your UK state pension? If they did I'm sure they'd want to tax it here and for income over 500,000pesos (app £7500) the tax rate is 32%.
Maybe I've missed something somewhere?

Gazza-d

The Philippines is one of a few countries, about 20 I believe were the UK government has a special arrangment, filipinos can use there SSS towards a UK pension. If you would trust the Phil goverment to pay regularly you would receive the value of your UK pension and any increases in the UK. Many countries your pension is fixed for life at the amount when you reach retirement age.

Rob_01

quiltman, mikemike and Gazza-d thank you so much for all the advice given. You have put me mind at rest on this issue. I'm on a 4 year countdown to retirement in the Philippines with my first scheduled visit in September. Although not the ideal time to visit, I want to experience the weather at different times of the year. But prior to any visit I had to make sure that my dream could be reality financially. You have all helped clarify this issue and I now know that it is possible, so once again thank you all very much.

firefox

So if I am right my Private pension in the UK if I move to Philippines I have to pay tax on it.I am in Canada and wanted to move to asia due to heath reasons I am British.one off the reason is moving to asia is the tax that you pay in Canada also the cost of living. I am looking at retirement visa (SRRV).

quiltman

A UK Private pension can be paid gross, once you have been out of UK for a FULL tax year. EXCEPT for the US, any State or Government pensions are excluded from double taxation Treaties and tax will be deducted at source. See my earlier post in this thread.
You would have to check here for the particular country you are moving too, to see what that particular DTT allows.
https://www.gov.uk/government/public...with-uk-income

quiltman

Just checked this document for Canada. If i read it correctly, you are entitled to have ALL UK pensions paid gross. Whether this is worth it depends on the tax levels in Canada.
i knew there were 2 countries where this applied but could not remember which the other was besides USA!