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Old Sep 29th 2016, 2:49 pm   #46
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Default Re: Pensions - escaping UK taxation

I got my Certificate of Residence today.

Just fill out the document NeonHippy provided here and the excel file. Will not be done on the spot, it takes a few days. But no fuss at all.

When filling out the excel file I realised that I did not spend one single day outside Malaysia in 2016 so far. I donĀ“t think this has happend for a very very long time before when I was living in Europe
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Old Oct 1st 2016, 2:39 am   #47
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Default Re: Pensions - escaping UK taxation

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A very interesting article JC3. I wonder how HMRC will react when I inform them that I do not reside in the UK and have no desire to pay any income tax but I would quite like to pay national insurance contributions to boost my state pension?

I could use my tax relief to pay for the added contributions. Now that would be a sound investment.
Spurred on by JC3's most excellent post I decided to give this a go. A quick google search seemed to find the required form and I was off. I received a reply from HMRC yesterday informing me that I had used the wrong form. Google points to the form for UK residents whereas there is a different form for non-residents.

The letter from HMRC seemed to be trying to help by outlining the correct form which is attached to the back of an explanatory leaflet. However the link they provided to the leaflet was broken!

Anyway the correct link has been found. If you are interested in boosting your state pension you can start here https://www.gov.uk/government/public...ty-abroad-ni38. The leaflet is 36 pages long but you should read it carefully as the benefit may not be applicable to you for any of a number of reasons. Even if you think you are eligible, get a pensions forecast first to make sure that you really will benefit.

For example in my case I have paid NI contributions for 40+ years but because I was contracted out for most of those my 'basic' state pension is exceedingly basic.
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Old Oct 1st 2016, 4:50 am   #48
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Default Re: Pensions - escaping UK taxation

BB

kudos for the Malaysian system

This part of the south China sea or the 'Inland sea of china' as it is now known

The usual domestic wills here are treated as a mere suggestion despite there being copious conflictatory supreme court rulings dependent upon which day of the week it is and what time of day it might be etc.

Probate takes a new lifetime and life of its own, even simple small estates prove to take over two years to be resolved between the court, BIR and banks, plus property land registry if its owned etc. the costs for dealing with each through the legal vultures will soon wipe out the estate value. They want to know the estate value and all of a sudden it equals taxes and fees due, no matter how much or little, funny that!!

Sorry I encroached on a real situation for you, I have treated it as generic and how different it can be in SE Asia
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Old Oct 1st 2016, 6:38 am   #49
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Default Re: Pensions - escaping UK taxation

WTF!!

Dutifully filled in page one of form CF83, got close to the end of page 2 and elected to pay my contributions by direct debit. At which point the instruction is to fill in the direct debit mandate at the bottom of page 1. What direct debit mandate?

As you read through the guide and get to the form at the end, you the keen eyed observer will notice that the size of the paper changes. This is cunningly arranged so that when you print the form the DDM falls off the bottom of the page.

Solution, when you go to print the form make sure that you tick the 'Scale to Page' option. And practice writing in very tiny spaces.
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Old Oct 1st 2016, 8:43 am   #50
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Default Re: Pensions - escaping UK taxation

It may no longer be relevant but I did the same procedure many years ago. I had worked in UK and paid NI for 22 years but dropped that when I went to work in Hong Kong and became non-resident UK.
A financial planner convinced me to continue with something called class 4 voluntary payment? and buy back up to 10 years where I hadn't make any contributions.
I've now been receiving 95% of the OAP for the last 14+ years.....until last month.
I spend the winter in Bali and all mail goes to my home in Canada and they had sent me a letter which my neighbor eventually sent to me in Bali. It declared they will stop my pension payments until I verified I was still alive...how I was supposed to say I'm dead alludes me...anyway, I need a notary to verify I'm alive and well before they will continue with the payments.
I reckon it's been an investment but NOT increasing, due to inflation for some pensioners and not others according to where they live, challenges my logic.
In hindsight I should have used the money to buy a private pension and insurance plan.
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Old Oct 1st 2016, 2:45 pm   #51
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Default Re: Pensions - escaping UK taxation

I think this is a fairly regular occurrence now Davita. A friend here in Penang recently got one and had to prove that she is still alive.

If you think about it, with there being no necessity to inform U.K if a loved one has popped clogs, then there may well be a number of state pensions still plopping into bank accounts where the recipient may well have left planet.
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Old Oct 2nd 2016, 3:55 am   #52
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there may well be a number of state pensions still plopping into bank accounts where the recipient may well have left planet.
You are correct BB but they do say that the UK OAP can be paid anywhere so I'd like to know if it's indexed when we leave this planet as I'm considering going on Elon Musk's spaceship to Mars in 2022.

https://www.theguardian.com/technolo...ex-mars-colony

In this technology age I'd have thought HM Pension Service could have a website that requires all pensioners to send a signed selfie on their birthday, beside the newspaper as date evidence, to show still alive. That's what kidnappers do.
Hmmm can you tell I'm a cynic..
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Old Nov 3rd 2016, 10:16 am   #53
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Default Re: Pensions - escaping UK taxation

I'm wondering whether it would make sense for me to obtain a Malaysian tax registration number. Reading this thread I see hat several of you did. I'm not British, but banks in other countries are now starting to ask me in which country I'm tax resident. They do this to fulfill their CRS and FATCA obligations. Except for the odd holiday week abroad am I living full-time in Malaysia.
More about OECD's CRS: Common Reporting Standard (CRS) - Organisation for Economic Co-operation and Development
More about US's FATCA: https://www.irs.gov/businesses/corpo...or-individuals
For those of you who have applied for Malaysian tax registration: what consequences have you experienced thus far? Any tax forms received? Has Malaysia claimed any payment over previous years you lived here without submitting a tax form? I would be interested to hear your experiences.
FWIW: I'm here on MM2H and don't earn an income in Malaysia (don't have a job).

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Old Nov 3rd 2016, 11:08 am   #54
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Default Re: Pensions - escaping UK taxation

The answer to your question probably relies on the answer to 'what is your nationality and where are you currently tax resident'

That is before you retired you will have been subject to taxation by your national state but if working abroad may have paid your taxes locally taking advantage of the double taxation agreement between the two countries.

Now you are retired and do not have an occupational income so where is your income being paid? That may be either a state pension, a personal pension or investment income. You will have a tax liability in each country where income is generated. So you need to look at the double taxation agreement between Malaysia and each income generating country. If the DTA allows for your income to be taxed in Malaysia then it is very definitely in your interest to establish yourself as a Malaysian tax payer.

Living in Malaysia under MM2H you will not be taxed on income from overseas. You cannot work so have no income tax liability. You will only pay tax on property you buy and sell with a profit or when you come to sell your 'tax free' car. I believe, but have not tested this, that if you invest your savings in the Malaysian stock market this will not get taxed on MM2H.
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Old Nov 3rd 2016, 5:32 pm   #55
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Default Re: Pensions - escaping UK taxation

Hi SF, as you have determined banks are now under an obligation to establish where their clients are tax resident. You can say you are resident in Malaysia but (with all due respect) this does not constitute proof. The bank cannot insist that you provide them with such proof but, in the absence of such proof, they "may" refer your situation to their relevant tax authority (the IRS if the bank is in the US, HMRC if the bank is in the UK) and it would be for the IRS/HMRC to take matters further, normally by advising the tax authorities in your adopted country that you claim to be tax resident there.

I have it on good authority that Malaysia, in the case of MM2H'ers, would not take the matter any further since (as we all know) MM2H'ers have no need to make a tax declaration if all their income arises offshore; there being no tax liability.

As a tax lawyer once advised me "don't tell the taxman anything he cannot find out for himself".
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Old Nov 4th 2016, 8:29 am   #56
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Default Re: Pensions - escaping UK taxation

NeonHippy and IVV, thank you both for your responses. As NeonHippy states "You will have a tax liability in each country where income is generated." This will be applicable to me and I'm investigating what this means in reality. Thus far I think that I understand the implications. The bank I was referring to meanwhile accepted my claim of being tax-resident in Malaysia, even though I don't have a Malaysian tax registration number. If, sometime in the future, they come back to me and insist that I provide such a number will I apply for it. By the way: Malaysia states that it will join the OECD CRS in 2017. Maybe by then they will need to issue registration numbers to MM2Hers who live most of their time each year in Malaysia.
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Old Nov 6th 2016, 7:00 am   #57
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Default Re: Pensions - escaping UK taxation

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As NeonHippy states "You will have a tax liability in each country where income is generated." This will be applicable to me and I'm investigating what this means in reality. Thus far I think that I understand the implications.
I would add the caveat that there are, of course, many jurisdictions where there is NO tax liability on income generated and anyone resident in Malaysia would be well-advised to use investment vehicles based in these very jurisdictions.
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Old Nov 6th 2016, 11:07 am   #58
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Hi SF, as you have determined banks are now under an obligation to establish where their clients are tax resident. You can say you are resident in Malaysia but (with all due respect) this does not constitute proof. The bank cannot insist that you provide them with such proof ...
I was recently asked to submit proof of my residency in Malaysia to an offshore bank where I had held an account for many years. I received an e-mail asking that I send a certified copy of my tenancy agreement and a utility bill. I was told this was a requirement of the Jersey financial services authority, no doubt as a result of AEOI requirements.
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Old Nov 6th 2016, 11:56 am   #59
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Default Re: Pensions - escaping UK taxation

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I was recently asked to submit proof of my residency in Malaysia to an offshore bank where I had held an account for many years. I received an e-mail asking that I send a certified copy of my tenancy agreement and a utility bill. I was told this was a requirement of the Jersey financial services authority, no doubt as a result of AEOI requirements.
It depends on the bank as to what proof they are prepared to accept. If they have any concerns they will simply refer your case to the Inland Revenue who "may" then refer it onto Malaysia who will then "probably" bin it if you are an MM2H'er.

I think a tenancy agreement and utility bill is reasonable proof. Getting a tax number when you don't own a property is more onerous and may just lead to requests for a residency certificate, a tax return, a receipt of tax paid etc etc.
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Old Dec 9th 2016, 9:31 am   #60
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Default Re: Pensions - escaping UK taxation

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WTF!!

Dutifully filled in page one of form CF83, got close to the end of page 2 and elected to pay my contributions by direct debit. At which point the instruction is to fill in the direct debit mandate at the bottom of page 1. What direct debit mandate?

As you read through the guide and get to the form at the end, you the keen eyed observer will notice that the size of the paper changes. This is cunningly arranged so that when you print the form the DDM falls off the bottom of the page.

Solution, when you go to print the form make sure that you tick the 'Scale to Page' option. And practice writing in very tiny spaces.
No reply or correspondence from HMRC but I noticed today that they have deducted a payment from my account. I just need to ensure now that I live to 70 to be in pocket.
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