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Tax on UK State Pension in Grenada

Tax on UK State Pension in Grenada

Old Aug 17th 2019, 8:23 pm
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Default Tax on UK State Pension in Grenada

I'm trying to understand the mechanics of paying tax on my UK State Pension when in Grenada. Specifically, if we arrive in Grenada next June and spend the rest of the 2020 tax year there to become tax resident do we benefit from the UK Grenada DTA even if we do not have the pension remitted to Grenada?

Presumably we at some point notify the UK side that we have become non-resident with effect from January 1st 2020 so as to not have to pay UK tax beyond that date.
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Old Aug 17th 2019, 10:44 pm
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Default Re: Tax on UK State Pension in Grenada

Read the relevant HMRC pages on when you actually are NOT a uk resident for tax purposes, its not for a while after you get to Grenada so no hurry there.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/547118/160803_RDR3_August2016_v2_0final_078500.pdf.

Take advice, talk to people in Grenada, and a UK tax consultant if the sums involved are substantial.
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Old Aug 17th 2019, 10:47 pm
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Default Re: Tax on UK State Pension in Grenada

Read this - the 2 IR depts exchange info

https://www.gov.uk/government/public...a-tax-treaties
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Old Aug 17th 2019, 10:52 pm
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Default Re: Tax on UK State Pension in Grenada

You realise that if not uk resident, income from investments that were GCT free {eg ISAs} may become taxable, i have a feeling you might be ok in grenada but its something to check.

https://www.telegraph.co.uk/investin...a-move-abroad/

Also a dual taxation agreement may not save you anything, it just helps to prevent double taxation, but even then its not necessarily all good. If you pay tax in grenada rather than the uk, what is the rate you pay.

As already said, nothing happens till a while after you are here, Ill PM you.

Last edited by uk_grenada; Aug 17th 2019 at 11:06 pm.
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Old Aug 17th 2019, 11:32 pm
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Default Re: Tax on UK State Pension in Grenada

This is slightly more digestible -https://smithandwilliamson.com/media...dence-test.pdf

It suggests that if you move to Gda in June 2020 and never spend > 2 weeks in the uk from then on for several years, then in April 2021 you can claim, or you can engineer it so you remain uk resident if wished.

Depending on ties, maybe earlier?

Last edited by uk_grenada; Aug 17th 2019 at 11:38 pm.
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Old Aug 18th 2019, 5:31 am
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Default Re: Tax on UK State Pension in Grenada

Originally Posted by uk_grenada View Post
You realise that if not uk resident, income from investments that were GCT free {eg ISAs} may become taxable, i have a feeling you might be ok in grenada but its something to check.

https://www.telegraph.co.uk/investin...a-move-abroad/

Also a dual taxation agreement may not save you anything, it just helps to prevent double taxation, but even then its not necessarily all good. If you pay tax in grenada rather than the uk, what is the rate you pay.

As already said, nothing happens till a while after you are here, Ill PM you.
Countries which tax capital gains and investment income will clearly not recognise Uk tax-free wrappers such as ISAs and SIPPS and that and the administrative costs associated with filing taxes, particularly where there are issues of bureaucracy and foreign languages, is why I've decided not to push for residency in Portugal, certainly for now. Post-Brexit, there are still ways to get into Portugal with an appropriate visa.

Tax is not the motivation for moving to Grenada though, but there are additional costs to be considered so the less tax the better.
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Old Aug 18th 2019, 5:39 am
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Default Re: Tax on UK State Pension in Grenada

Originally Posted by uk_grenada View Post
This is slightly more digestible -https://smithandwilliamson.com/media...dence-test.pdf

It suggests that if you move to Gda in June 2020 and never spend > 2 weeks in the uk from then on for several years, then in April 2021 you can claim, or you can engineer it so you remain uk resident if wished.

Depending on ties, maybe earlier?
Five years ago we had to sweat the details of the Statutory Residence Test (all 100+ pages) going INTO the UK and that took professional advice to see round timing issues. I think that I'm Ok now that we need to:

not spend more than 15 days in the UK after we leave, not be tax resident in the following tax year and become tax resident in our destination country within six months*. This last bit is the clincher - we therefore have to be in Grenada for sufficient time in 2020 to then be tax resident for the whole of 2020, which as you state, will not be verifiable until near the end of 2020. However, one doesn't have to file UK taxes for the 2019/2020 tax year until the deadline of 31st January 2021.

*alternatively you should have your only home or homes in that country within six months of the leaving date but we are not planning to comply with that, though we might IF it is a deal-breaker.
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