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Paying tax on a private pension

Paying tax on a private pension

Old Sep 16th 2023, 9:56 am
  #46  
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Default Re: Paying tax on a private pension

Originally Posted by Red Eric
HMRC may know you live in Hungary but they won't instruct your pension provider to pay gross until you have presented them with the completed form DT Individual together with the correct attestation from the Hungarian tax office.

When you have completed the procedure correctly, HMRC will assign the code "NT" to your private pension, which means that income is tax free in the UK. If the code isn't "NT" then that process hasn't been followed and you need to action it to avoid needlessly paying UK tax.

Looking at a previous post of yours on this thread, the importance of getting this sorted in your case shouldn't be underestimated, as other pensions becoming due in future will increase the tax taken by the UK if it's not done.

And if I can jump in from the Spanish page...
Here you can only get the NT code from HMRC by proving you are a tax paying resident in Spain (Im assuming its any and all countries as its the HMRC that ask or this).
Before Brexit there were thousands here in Spain who were under the radar and didnt realise that they would have paid less tax here than if they were in the UK...

Here I had to make a tax return and get a fiscal certificate from the Spanish tax office, you then download the form from HMRC and detail what monies you get paid in the Uk and send these off.
Even though I was self employed in the Uk and had access you cannot do it online...HMRC need to see the physical cert..
About two months later the paperwork returned with a notice my tax code was changing, a week later I got the NT coding, which I gave to the accountant and he sent it to the tax office in Alicante...

My private pension is paid gross into a Uk account (as it cannot be paid anywhere else due to rules now)...I also received all of the tax back in the financial year from the pension provider (tax year here is Jan 1st to Dec 31st), the previous years tax was sent from HMRC and you need to find someone in the Uk who is prepared to pay it into a Uk bank (the cheque will be in their name, so you better trust them).
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Old Sep 16th 2023, 10:59 am
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Default Re: Paying tax on a private pension

Originally Posted by Barriej

And if I can jump in from the Spanish page...
Here you can only get the NT code from HMRC by proving you are a tax paying resident in Spain (Im assuming its any and all countries as its the HMRC that ask or this).
Before Brexit there were thousands here in Spain who were under the radar and didnt realise that they would have paid less tax here than if they were in the UK...

Here I had to make a tax return and get a fiscal certificate from the Spanish tax office, you then download the form from HMRC and detail what monies you get paid in the Uk and send these off.
Even though I was self employed in the Uk and had access you cannot do it online...HMRC need to see the physical cert..
About two months later the paperwork returned with a notice my tax code was changing, a week later I got the NT coding, which I gave to the accountant and he sent it to the tax office in Alicante...

My private pension is paid gross into a Uk account (as it cannot be paid anywhere else due to rules now)...I also received all of the tax back in the financial year from the pension provider (tax year here is Jan 1st to Dec 31st), the previous years tax was sent from HMRC and you need to find someone in the Uk who is prepared to pay it into a Uk bank (the cheque will be in their name, so you better trust them).
I've just received a tax rebate from HMRC sent to my Hungarian address. Luckily my grandson will be over next week so I'll give it to him to take back to the UK to pay into my UK bank account. I'm retired and have never had an NT code,either here or when I was working and earning a salary in South Africa
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Old Sep 16th 2023, 1:08 pm
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Default Re: Paying tax on a private pension

FenTiger Another minor point to be aware of.

At the mo', you may not be too bothered about what looks like a very small amount of tax taken from the smaller of your pensions. However, this will also mean that the tax code on the other pension is only allocating you part of what you should benefit from in personal allowance.

Getting the NT code on your private pension and paying zero tax on that would also get the entire £12,570 set against you public sector pension, thus reducing the amount of tax due on that one.
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Old Sep 16th 2023, 1:08 pm
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Default Re: Paying tax on a private pension

Originally Posted by Sachina
I've just received a tax rebate from HMRC sent to my Hungarian address. Luckily my grandson will be over next week so I'll give it to him to take back to the UK to pay into my UK bank account. I'm retired and have never had an NT code,either here or when I was working and earning a salary in South Africa
You can lead a horse to water ......
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Old Sep 16th 2023, 1:48 pm
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Default Re: Paying tax on a private pension

Originally Posted by Red Eric
You can lead a horse to water ......
And what exactly is that meant to mean?
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Old Sep 16th 2023, 2:27 pm
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Default Re: Paying tax on a private pension

Originally Posted by Red Eric
You can lead a horse to water ......
Still at the water's edge RE, as I have another major project ongoing, but I shall drink shortly!

And again, many thanks for the help & information!
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Old Sep 16th 2023, 6:05 pm
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Default Re: Paying tax on a private pension

Originally Posted by Barriej
My private pension is paid gross into a Uk account (as it cannot be paid anywhere else due to rules now)...I .
From experience it is very difficult to impossible to get a UK bank to give you an account if you are not a UK resident so how is that managed?
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Old Sep 17th 2023, 7:01 am
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Default Re: Paying tax on a private pension

So, I got a call back from a specialist at HMRC. He'd already got background details of my enquiry so had some info ready.
He said that the easiest way is just to pay the tax and then claim it back. Another way is to request a small lump sum from each pension which will be tax free. HMRC will then issue a me a new tax code and I will be able to cash in the rest of my pensions without paying tax.
All that means time. I'm looking at stopping work at the end of the year and don't really want to delay that. The guy at HMRC said that it can take up to 16 weeks to receive a written reply from them. I don't want to wait that long as it will set my plans back. The fastest way for me is to pay the tax and claim it back. That way I get a lump sum now and a smaller lump sump in the form of a rebate in a few months.
Red Eric...I'll check out that link, this horse is thirsty
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Old Sep 17th 2023, 7:34 am
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Default Re: Paying tax on a private pension

Originally Posted by PaulinEger
So, I got a call back from a specialist at HMRC. He'd already got background details of my enquiry so had some info ready.
He said that the easiest way is just to pay the tax and then claim it back. Another way is to request a small lump sum from each pension which will be tax free. HMRC will then issue a me a new tax code and I will be able to cash in the rest of my pensions without paying tax.
All that means time. I'm looking at stopping work at the end of the year and don't really want to delay that. The guy at HMRC said that it can take up to 16 weeks to receive a written reply from them. I don't want to wait that long as it will set my plans back. The fastest way for me is to pay the tax and claim it back. That way I get a lump sum now and a smaller lump sump in the form of a rebate in a few months.
Red Eric...I'll check out that link, this horse is thirsty
Thank you for the feedback, It's good to know I was correct despite opinions to the contrary.

I hope you receive your pension payout quickly and can look forward a happy retirement.

Originally Posted by Sachina
I might be wrong but I think when you cash in the pensions the Insurance Company will deduct any tax before paying them out to you. Try looking at the link below which hopefully you'll find useful.

https://www.gov.uk/income-tax
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Old Sep 17th 2023, 7:45 am
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Default Re: Paying tax on a private pension

Originally Posted by PaulinEger
Red Eric...I'll check out that link, this horse is thirsty
A caveat in your case.

We drifted somewhat off your original question in the course of the thread, and were discussing situations where people are receiving ongoing regular payments from the UK on a PAYE basis and how to rectify having tax taken off at source which shouldn't be.

I don't think that link is of much use in your particular scenario, where you're completely cashing in on a one-off basis, nor (were it to apply) where irregular ad-hoc payments are made.

If you've got other, regular pension income though, it will still be useful
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Old Sep 17th 2023, 10:45 am
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Default Re: Paying tax on a private pension

Originally Posted by Red Eric
A caveat in your case.



If you've got other, regular pension income though, it will still be useful
I do have other pensions, none of which are worth a great deal, which I will look at dealing with later. At this moment, I'm desperate to get out of teaching and want to spend more time doing the things that interest me, so taking a couple of lump sums now will help me along until I claim my State pension in 10 years time.
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Old Sep 17th 2023, 12:03 pm
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Default Re: Paying tax on a private pension

Originally Posted by Peter_in_Hungary
From experience it is very difficult to impossible to get a UK bank to give you an account if you are not a UK resident so how is that managed?
I still have a Uk account that was not closed when we moved over.
My UK private pension can ONLY be paid to a Uk account due to the rules changing after Brexit (its Nationwide, who have no issues with overseas residents keeping their accounts)....I pay zero tax in the Uk just here in Spain..
Once I get my OAP (in 6 years time) that will be paid direct in Euros to my Spanish account at a better rate than I can get and without any bank charges.
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Old Sep 17th 2023, 1:17 pm
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Default Re: Paying tax on a private pension

Originally Posted by Barriej
I still have a Uk account that was not closed when we moved over.
My UK private pension can ONLY be paid to a Uk account due to the rules changing after Brexit (its Nationwide, who have no issues with overseas residents keeping their accounts)....I pay zero tax in the Uk just here in Spain..
Once I get my OAP (in 6 years time) that will be paid direct in Euros to my Spanish account at a better rate than I can get and without any bank charges.
My account was with Barclays International and was closed by them in 2014 when they decided that they did not want business from Hungary amongst some other countries. After punting around I ended up Santander International which was about the only place I could get a UK account, it works for me but you need a minimum of 25K in your account(s) in order to keep the account(s).

I have found, talking to other expats, as well as personnel experience that you can keep an account you have if you leave the UK but opening a new one as a resident outside of the UK is difficult to impossible.

My state OAP is paid direct to my Hungarian account and it is paid gross. I have never had to fill in any forms to get it paid gross. When I first started to get my OAP I received a cheque every 4 weeks (which had to be paid into my bank here) then the system changes and I was asked to which bank they should transfer the pension, I told them and it has been that way ever since.

Whilst I can't remember I suspect that when I first claimed my OAP I had the option of having it paid through the Hungarian pension office or direct to me, I chose direct. This process may have been enough to trigger gross payments.

For me and others who have difficulty opening a UK account from abroad - do you know of any UK banks that will give an account to expats living outside the UK?
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Old Sep 17th 2023, 2:02 pm
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Default Re: Paying tax on a private pension

Originally Posted by Peter_in_Hungary
My account was with Barclays International and was closed by them in 2014 when they decided that they did not want business from Hungary amongst some other countries. After punting around I ended up Santander International which was about the only place I could get a UK account, it works for me but you need a minimum of 25K in your account(s) in order to keep the account(s).

I have found, talking to other expats, as well as personnel experience that you can keep an account you have if you leave the UK but opening a new one as a resident outside of the UK is difficult to impossible.

My state OAP is paid direct to my Hungarian account and it is paid gross. I have never had to fill in any forms to get it paid gross. When I first started to get my OAP I received a cheque every 4 weeks (which had to be paid into my bank here) then the system changes and I was asked to which bank they should transfer the pension, I told them and it has been that way ever since.

Whilst I can't remember I suspect that when I first claimed my OAP I had the option of having it paid through the Hungarian pension office or direct to me, I chose direct. This process may have been enough to trigger gross payments.

For me and others who have difficulty opening a UK account from abroad - do you know of any UK banks that will give an account to expats living outside the UK?
For what it's worth. Did you know you can receive your OAP every 13 weeks, which is what I have done?. You should also be able to arrange with your pension provider to make payments every three or six months rather than monthly.

If I remember rightly although there are another couple of UK bank which still accept new non UK residents,they both require deposits much larger than £25,000. You could however consider opening an account with an offshore bank where thedeposit requirement can be as little as £2,000 to £5,000.
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Old Sep 17th 2023, 7:21 pm
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Default Re: Paying tax on a private pension

Originally Posted by Sachina
For what it's worth. Did you know you can receive your OAP every 13 weeks, which is what I have done?. You should also be able to arrange with your pension provider to make payments every three or six months rather than monthly.

If I remember rightly although there are another couple of UK bank which still accept new non UK residents,they both require deposits much larger than £25,000. You could however consider opening an account with an offshore bank where thedeposit requirement can be as little as £2,000 to £5,000.
Thanks - I knew that the OAP can be paid quarterly, but we use it and my wifes OAP for daily living so 4 weekly is fine for us.

AFAIK there is no regulatory reason for UK banks not to give accounts to non residents, it is just the banks being reluctant to take the business.
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