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Tax on UK State Pension

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Old Apr 5th 2014, 10:37 am
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Default Tax on UK State Pension

Hi all - sorry if this has already been answered.
I started receiving my UK state pension recently, paid gross into my UK bank account, just like my UK company pension.
Presumably I will have to declare the UK pension on top of my UK company pension on which I already pay Italian IRPEF and have done for the last 4 years I have been a resident in Italy???
I am a bit confused about the Double Taxation Agreement.
Thanks for replies in advance.
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Old Apr 5th 2014, 11:35 am
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Default Re: Tax on UK State Pension

Originally Posted by ozzygobbin View Post
Hi all - sorry if this has already been answered.
I started receiving my UK state pension recently, paid gross into my UK bank account, just like my UK company pension.
Presumably I will have to declare the UK pension on top of my UK company pension on which I already pay Italian IRPEF and have done for the last 4 years I have been a resident in Italy???
I am a bit confused about the Double Taxation Agreement.
Thanks for replies in advance.
State pension isn't taxable in the UK, however it does go towards your tax free allowance, so I assume it's the same in Italy. If you are still getting your company pension paid gross, then tere is no need to do anything UKwise, just report the extra money in Italy, and pay the extra taax. The double taxataion agreement really affects those who have governmant pensions, such as police and civil servant pensions that are always taxable, and taxed, in the UK, it's tht sort of tax you can offset against your Italian tax so you are not being taxed twice on the same money.
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Old Apr 5th 2014, 11:50 am
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Default Re: Tax on UK State Pension

If you are Italian tax resident and receiving your UK income gross then the double taxation treaty is pretty much irrelevant to you. Similarly, UK personal allowance. As you say, add the state pension on top of your private pension for IPREF purposes. For the record, double taxation comes into play when income is received net. Not just for government or civil service payments where separate (non) declaration conditions apply.
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Old Apr 5th 2014, 12:11 pm
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Default Re: Tax on UK State Pension

Thanks to both of you - very helpful and all seems clear now....just a pity that i have to pay much more tax here in Italy than I would in the UK due to the tax bands here which of course favour the rich and hit the middle-income earners.
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Old Apr 5th 2014, 12:27 pm
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Default Re: Tax on UK State Pension

By the way Capo Boi, you sound as if you are Sardo or living in Sardegna. My wife is Sarda and who knows one day we might end up there instead of just visiting (diminishing) family and friends in the Sassari area.
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Old Apr 5th 2014, 12:53 pm
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Default Re: Tax on UK State Pension

Hello Ozzy,

Good spot. Just outside Villasimius. Bought a house there almost 15 years ago. It's a few years since I've last been to Sassari. Think there a few members on here who live around Sassari though.
Thinking about what you said, taxes are certainly higher here. Pretty much for all. A retired pensioner on say a £20,000 UK income would pay something like £2000 (€2,4000) tax in the UK. Resident in Italy including regional taxes the same person will pay closer to £3,000 (€3,600) in tax.

Good luck.

Last edited by Capo Boi; Apr 5th 2014 at 12:56 pm.
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Old Apr 5th 2014, 4:57 pm
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Default Re: Tax on UK State Pension

Ozzygobbin, I recently reached UK state pension age but I am resident, working and paying INPS in Italy and have been for a number of years. In fact I have roughly equal years of NI payments in UK and Italy. However the documentation on gov.uk is clear; if you have worked or are working abroad - you must claim the state pension through the relevant authority of that country. I am interested to know how you managed to get UK state pension whilst resident in Italy, maybe you never worked in Italy?
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Old Apr 6th 2014, 1:44 pm
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Default Re: Tax on UK State Pension

Hi Chris,
I worked for London-based Reuters news agency (now ThomsonReuters) for over 30 years and was a correspondent in Rome, then Paris, then Milan and finally Tokyo. I took early retirement in 2008 and moved to Rome to live with my Sardinian wife and her ageing mother, becoming a resident here. So all my working life I was paying UK National Insurance contributions and the rest no matter whether I was working abroad or not. That is why I have a private pension from Reuters and from last May started to receive the UK state pension, both paid gross into my UK bank account. I have an Italian bank account (a ridiculously costly and Dickensian system even if it is an online account!) and about twice a year make a cash transfer between banks, not ideal I know so I am actually looking at another cash transfer system. It is very annoying being aware I am paying much more tax in Italy than I would be in the UK but that it a disadvantage of being resident here. I really can't think of any advantages in fact as I have no wish to buy a car or property here. And it was only from last May that I was able to get the Italian National Health System cover (which I have to renew every year for some reason), having paid for the same cover the previous two years (something like 7.5 % of one's global income if I remember right.) I first worked in Rome in 1980 and nothing much has changed regarding corruption, bureaucracy and social justice. In fact I am getting rather tired of being here, but to be honest as long as my 93-year-old mother-in-law (who owns the house we live in) is alive I don't see any alternative. Let me know if you want to keep in touch other than through this site. Bestest.
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Old Apr 6th 2014, 5:22 pm
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Default Re: Tax on UK State Pension

Ah yes, that would explain it, to be honest it seems to me that the Italian state pension may be better than the UK state pension but it seems you cannot claim it whilst still employed and paying contributions to INPS (I'd gladly be corrected here) and so I cannot get it yet.
I bought some shares in RTR about 15 years ago, thinking they might benefit from the .com boom, sadly I was wrong and sold them nine years later at a significant loss, I think they are even lower now!
Where are you in Rome?
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Old Apr 6th 2014, 5:56 pm
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Default Re: Tax on UK State Pension

Yes you are quite right - Italians get at least double the UK pension which is the lowest in Europe, the only difference which is good for Brits is that I only needed 30 years of contributions while Italians have to pay 42 years (I think) of contributions...and the age you can retire keeps going up! I know that before they abolished the 'baby pensions' someone at the Bank of Italy could retire at 50 on nearly full pay. It's a strange country. And the way INPS and its buffoon of a boss is going who knows how long the state will have the cash to pay pensions if at all. I live just off Corso Trieste, and you?
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Old Apr 8th 2014, 9:07 pm
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Default Re: Tax on UK State Pension

out towards Ostia
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Old Apr 9th 2014, 8:12 pm
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Default Re: Tax on UK State Pension

Originally Posted by ozzygobbin View Post
Yes you are quite right - Italians get at least double the UK pension which is the lowest in Europe, the only difference which is good for Brits is that I only needed 30 years of contributions while Italians have to pay 42 years (I think) of contributions...and the age you can retire keeps going up! I know that before they abolished the 'baby pensions' someone at the Bank of Italy could retire at 50 on nearly full pay. It's a strange country. And the way INPS and its buffoon of a boss is going who knows how long the state will have the cash to pay pensions if at all. I live just off Corso Trieste, and you?
That is not the case, it very much depend on contribution and years of work.
This is so especially for women, they never got years added for looking after their children, so you got plenty of them with amounts of less than Euro 400 or thereabout. If they were away from work for years, very difficult to reach a full pension.
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