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Tax resident in Philippines, UK income.

Tax resident in Philippines, UK income.

Old Jul 23rd 2023, 1:24 pm
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Default Tax resident in Philippines, UK income.

Hi there. Can anyone confirm that resident aliens in Philippines are tax free, hence being a British citizen but Philippines tax resident implies no tax on income earned outside Philippines?

Many thanks.
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Old Jul 23rd 2023, 3:56 pm
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Default Re: Tax resident in Philippines, UK income.

Originally Posted by smallpiff
Hi there. Can anyone confirm that resident aliens in Philippines are tax free, hence being a British citizen but Philippines tax resident implies no tax on income earned outside Philippines?

Many thanks.
You would still likely be libel for tax in any country where you earned the income. Also you will be taxed on any income earned in the Philippines. There's no free lunch.
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Old Jul 23rd 2023, 4:10 pm
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Default Re: Tax resident in Philippines, UK income.

Originally Posted by smallpiff
Hi there. Can anyone confirm that resident aliens in Philippines are tax free, hence being a British citizen but Philippines tax resident implies no tax on income earned outside Philippines?

Many thanks.
as a UK ex pat you will not pay cgt or income tax in the Philippines if the income and gains are derived outside of the Philippines.
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Old Jul 23rd 2023, 10:19 pm
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Default Re: Tax resident in Philippines, UK income.

Mike Mike is correct, but you need to register in your local Philippines tax office. Fillin a form that is certified and send it to HMRC. All income from outside the Philippines is free of tax, if you are not a Filipino. Pensions are tax free.
However UK State Pension and any other Government paid pensions, are payable to HMRC, as is any other income derived from fixed UK assets, such as Rental Income, Dividend and Interest on UK accounts if over threshold.
Your UK pension will increase yearly, but you will not receive any add ons such as Winter Fuel Payment.
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Old Jul 24th 2023, 12:06 am
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Default Re: Tax resident in Philippines, UK income.

Originally Posted by tropicofcancer
Mike Mike is correct, but you need to register in your local Philippines tax office. Fillin a form that is certified and send it to HMRC. All income from outside the Philippines is free of tax, if you are not a Filipino. Pensions are tax free.
However UK State Pension and any other Government paid pensions, are payable to HMRC, as is any other income derived from fixed UK assets, such as Rental Income, Dividend and Interest on UK accounts if over threshold.
Your UK pension will increase yearly, but you will not receive any add ons such as Winter Fuel Payment.
I have never registered anything in local tax office in 20 years I am not by law required to have a TIN

I receive UK dividends by registering on line with a US based broker, so there is no UK source.

fill out a P85 for the UK

https://www.gov.uk/tax-right-retire-abroad-return-to-uk

Last edited by mikemike; Jul 24th 2023 at 12:14 am.
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Old Jul 24th 2023, 2:23 am
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Default Re: Tax resident in Philippines, UK income.

Sorry posted full details, but reply has not appeared. Will redo later, as have an urgent appointment.
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Old Jul 24th 2023, 5:54 am
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Default Re: Tax resident in Philippines, UK income.

Thanks for the responses guys.

From comments my takeaways are this
- No tax on overseas income for Philippine resident alien
- UK sourced state income (pension) would be taxed in the UK.
- UP sourced private pensions would be tax free if Philippines tax resident
- UK based fixed asset income (rents) would be taxable in UK (presumably only the elements above the UK personal threshold?)
- How about pre-held UK ISAs? Dividends can be paid out. These are not within a pensionable wrapper and yet are tax free (in the UK at least)

Noting Mikes comments did anyone manage to set up a (US) broker funds outside the UK and outside Philippines - in a tax favourable location such as HK or UAE. I guess there would probably be a requirement to live and work in these locations to facilitate such a setup and to operate a parallel banking facility?

Many thanks for these thoughts.
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Old Jul 24th 2023, 8:06 am
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Default Re: Tax resident in Philippines, UK income.

Originally Posted by smallpiff
Thanks for the responses guys.

From comments my takeaways are this
- No tax on overseas income for Philippine resident alien
- UK sourced state income (pension) would be taxed in the UK.
- UP sourced private pensions would be tax free if Philippines tax resident
- UK based fixed asset income (rents) would be taxable in UK (presumably only the elements above the UK personal threshold?)
- How about pre-held UK ISAs? Dividends can be paid out. These are not within a pensionable wrapper and yet are tax free (in the UK at least)

Noting Mikes comments did anyone manage to set up a (US) broker funds outside the UK and outside Philippines - in a tax favourable location such as HK or UAE. I guess there would probably be a requirement to live and work in these locations to facilitate such a setup and to operate a parallel banking facility?

Many thanks for these thoughts.
UK ISA's are not taxed in the Philippines as they are not a Philippines based investment. Isa's they retain their UK tax wrapper for UK expats and you can manage the funds inside the ISA. You cannot add new money in.

My Broker is online Interactivebroker.com as a UK expat I am not allowed to have a UK based broker. you can set up bank accounts in Isle of man without living there, Sterling payments are made form Citibank in New York Just go on line and check their FAQ and send them an email for further clarification etc.

Suggest you wait for TOC response as he has been here as long as I have and may be far more up to date than I am
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Old Jul 25th 2023, 1:15 am
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Default Re: Tax resident in Philippines, UK income.

Originally Posted by smallpiff
Thanks for the responses guys.

From comments my takeaways are this
- No tax on overseas income for Philippine resident alien
- UK sourced state income (pension) would be taxed in the UK.
- UP sourced private pensions would be tax free if Philippines tax resident
- UK based fixed asset income (rents) would be taxable in UK (presumably only the elements above the UK personal threshold?)
- How about pre-held UK ISAs? Dividends can be paid out. These are not within a pensionable wrapper and yet are tax free (in the UK at least)

Noting Mikes comments did anyone manage to set up a (US) broker funds outside the UK and outside Philippines - in a tax favourable location such as HK or UAE. I guess there would probably be a requirement to live and work in these locations to facilitate such a setup and to operate a parallel banking facility?

Many thanks for these thoughts.
I understood that state pension in the UK is not taxable... but counts toward your tax allowance and private pensions are taxed at source?

What about military pensions?

I understood that senior citizens in the Philippines are subject to tax but currently at 0%.

Clarification please...
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Old Jul 25th 2023, 8:21 pm
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Default Re: Tax resident in Philippines, UK income.

1/ Uk state pension is taxable subject to personal allowances
2/ Occupational pensions schemes remitted directly overseas may not be taxed in the UK if agreed by HMGOV< I am still waiting for their response. otherwise they are offset against UK personal allowances.
3/ No idea what the process is for UK Government pensions.
4/ Philippines citizens who receive their pensions are exempt
5/ Foreigners are exempt for Philippines income tax on foreign distributions
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Old Jul 26th 2023, 10:43 am
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Default Re: Tax resident in Philippines, UK income.

Some further research obtained from tax specialists.

Circumstances are governed by this link.
https://www.gov.uk/government/public...s-tax-treaties

Private UK pension will be taxable only in the Philippines and the UK state pension will be taxable only in the UK.
The process requires application for an NT code for the private pension by completing a DT-Individual form to ensure the pension provider does not withhold tax. It will likely need to be declared in the Philippines however, there are no local tax implications with this.
There is a caveat in that if one returns to the UK within 5 years after leaving, HMRC may claw back the tax on the private pension as it is one of the income sources listed within the temporary non-residence anti-avoidance provisions.

This is simply someone's reading of the position, it may not be accurate and doesn't constitute advice either.
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Old Dec 23rd 2023, 8:46 am
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Default Re: Tax resident in Philippines, UK income.

Originally Posted by mikemike
1/ Uk state pension is taxable subject to personal allowances
2/ Occupational pensions schemes remitted directly overseas may not be taxed in the UK if agreed by HMGOV< I am still waiting for their response. otherwise they are offset against UK personal allowances.
3/ No idea what the process is for UK Government pensions.
4/ Philippines citizens who receive their pensions are exempt
5/ Foreigners are exempt for Philippines income tax on foreign distributions
The only way to avoid tax on UK gov pensions is to lose your nationalty and become a Filipine citizen thro the Bi office Tempting because the tax I pay would go a long way here but couldn't,t give up my passport
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Old Dec 23rd 2023, 11:56 pm
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Default Re: Tax resident in Philippines, UK income.

Well there is another way, download from the HMRC website "Double Taxation Treaty Relief". However if in the future, the Philippines follows Thailand and taxes overseas remittances your tax liability could be significantly higher, because of the much higher tax free threshold in the UK.
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Old Mar 25th 2024, 4:48 pm
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Default Re: Tax resident in Philippines, UK income.

Originally Posted by mikemike
UK ISA's are not taxed in the Philippines as they are not a Philippines based investment. Isa's they retain their UK tax wrapper for UK expats and you can manage the funds inside the ISA. You cannot add new money in.
I have been reading this thread with interest.
Would you know if a citizen (dual UK/Philippines) of The Philippines who accumulated ISAs while resident in the UK is then liable for tax on capital gains and dividends within these ISAs if they eventually move back to Philippines and become resident there?

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