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Pension taxation confusion

Pension taxation confusion

Old Apr 22nd 2013, 11:47 pm
  #1  
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Default Pension taxation confusion

Hi, don't know if anyone out there can help. My husband and I have been living in Malaysia happily now for 3 1/2 years. He is receiving a police pension from the UK, taxed at source but not yet old enough to receive a state pension. We told the tax office we were coming out here to live permenantly in 2009 and have no property in the UK. Under the dual taxation agreement is it possible not to pay tax on that pension in the UK? How do we go about this? Can we claim any back if successful? Is it true that his pension (if registered here), will be untaxed? This would obviously make a tremendous difference to our income and provide us with sufficient additional funds to visit our children more often if true. Any advise would be most welcome as we seem to recieve conflicting reports from local advise.
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Old Apr 23rd 2013, 3:07 am
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Default Re: Pension taxation confusion

Originally Posted by Jill Brown View Post
Hi, don't know if anyone out there can help. My husband and I have been living in Malaysia happily now for 3 1/2 years. He is receiving a police pension from the UK, taxed at source but not yet old enough to receive a state pension. We told the tax office we were coming out here to live permenantly in 2009 and have no property in the UK. Under the dual taxation agreement is it possible not to pay tax on that pension in the UK? How do we go about this? Can we claim any back if successful? Is it true that his pension (if registered here), will be untaxed? This would obviously make a tremendous difference to our income and provide us with sufficient additional funds to visit our children more often if true. Any advise would be most welcome as we seem to recieve conflicting reports from local advise.
Hi Jill, and !!
You need to search on the HMRC website. There is a form there for retirees living abroad. As I understand it, you CAN get pensions paid tax free as it is treated as offshore income in the UK and as foreign income in Malaysia. Your husband may also need to file a UK Tax Return. If you know his tax reference for the pension payments, you could always ring the relevant Tax Office. Of course, it may depend on where the pension is actually paid - i.e. into a UK Bank or directly into a Malaysian Bank. Perhaps others my have a better idea?

I was made redundant in August last year and hoped to move to Malaysia in November - it didn't quite work out and we didn't arrive here until March. As a consequence, I have to complete and file a Tax Return for year 2012/2013. My circumstances are a bit complicated as I have 2 (private) pensions (don't qualify for State pension until 2020!), 1 of which I managed to get paid tax free (until end of March, but some tax has been deducted in my April payment!) and the other had tax deducted! Good luck!
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Old Apr 23rd 2013, 4:01 am
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Default Re: Pension taxation confusion

Hi Jill and welcome to the forum

Bluenose is more or less correct BUT, I think I am correct in saying, that Government pensions (that would include Police) will not fall within the tax-free category. I know of others here in Penang (one friend on a Army pension, another on Police pension) they are both taxed in UK at source.

Yes, it's a bummer and doesn't seem fair, but I don't think there is anything you can do unfortunately.
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Old Apr 23rd 2013, 5:39 am
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Default Re: Pension taxation confusion

Thank you for the information...if a little disappointing. My husband will talk to the council offices who administer his pension later today to confirm what you have said but sadly I think you could well be correct.



Originally Posted by Bluenose1 View Post
Hi Jill, and !!
You need to search on the HMRC website. There is a form there for retirees living abroad. As I understand it, you CAN get pensions paid tax free as it is treated as offshore income in the UK and as foreign income in Malaysia. Your husband may also need to file a UK Tax Return. If you know his tax reference for the pension payments, you could always ring the relevant Tax Office. Of course, it may depend on where the pension is actually paid - i.e. into a UK Bank or directly into a Malaysian Bank. Perhaps others my have a better idea?

I was made redundant in August last year and hoped to move to Malaysia in November - it didn't quite work out and we didn't arrive here until March. As a consequence, I have to complete and file a Tax Return for year 2012/2013. My circumstances are a bit complicated as I have 2 (private) pensions (don't qualify for State pension until 2020!), 1 of which I managed to get paid tax free (until end of March, but some tax has been deducted in my April payment!) and the other had tax deducted! Good luck!
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Old Apr 24th 2013, 7:47 am
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Default Re: Pension taxation confusion

Originally Posted by Jill Brown View Post
Yes, it is where we stayed when we first came to Port Dickson... not tatty, nice food, good price, beautiful position and right next to the Yacht Club... the Bayu Beach. If you want to meet, send me a private message and I will send you our address.. you would be very surprised at what we have been able to achieve here. Happy to show you what has changed and what is yet to come.
Thanks for the info.
We are in UK for our annual 6 months stint at the moment though.
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