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Old May 25th 2023 | 2:36 am
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As I am now a resident I have to file a tax return. It is my 1st so I went to an accountant.
It is simple, a Teachers pension, below £12,575, so no tax! The accountant rang me and said PT. tax wanted 1000 Euros!!!! She has many UK. clients and has never been asked for tax on UK. Government pensions! She rang PT. Tax and they said the rules have not changed. She thinks it is a computer error and is waiting. Has anyone had this problem, this year?
 
Old May 25th 2023 | 4:39 am
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Default Re: Tax

I was under the impression that unlike State pensions or private pensions or annuities from anywhere in the world, pensions earned from working for the Government are not taxed in Portugal, but in the country of origin.
 
Old May 25th 2023 | 7:06 am
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Default Re: Tax

If it is a government occupational pension then yes,usually it is first dibs in the country of origin.However,if the pension is accrued from teaching in the private sector then it is regarded as a private pension.Also if the pension is from the old "Teachers Pensions Mutual fund" now administered by LV then it is regarded as an annuity.The latter two should then be paid tax free in the UK and taxed locally.
One further thought-I am in France and a few years back people with small uk govt occupational pensions ie below the UK personal tax allowance suddenly found themselves being taxed in France as some "clever " person in the french tax office claimed that people must pay tax somewhere regardless.Eventually it went to the tax ombudsman who decided that that was not the case and the wording of the tax treaty was quite specific.So I wonder if such a "clever" person in the PT tax office is thinking along the same lines
 
Old May 25th 2023 | 8:00 am
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Default Re: Tax

Just to add, since this is your first year for tax in PT, did you get NHR status? This might be relevant to your situation. The PT tax office needs to know your UK Government occupational pension which is taxable in the UK, and any other incomes, just so they know your global income so that in case you do come within a taxable criterion they know which rate to charge as there is a sliding scale. The Basic UK pension also needs to be declared for the same purpose but the Government occupational pension is taxed differently in the UK.
 
Old Jun 18th 2023 | 11:51 pm
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Default Re: Tax

Originally Posted by morro
As I am now a resident I have to file a tax return. It is my 1st so I went to an accountant.
It is simple, a Teachers pension, below £12,575, so no tax! The accountant rang me and said PT. tax wanted 1000 Euros!!!! She has many UK. clients and has never been asked for tax on UK. Government pensions! She rang PT. Tax and they said the rules have not changed. She thinks it is a computer error and is waiting. Has anyone had this problem, this year?
Did you get anywhere with this?

I see the simulator, which was working fine in terms of handling public service pensions from abroad last year, is not doing so this year. Without that in working order, I can't easily decide on best options for this year's declaration - and if it's not just the simulator but also the tax calculation itself which is affected, obviously that's going to take some sorting out after submission.
 
Old Jun 19th 2023 | 1:30 am
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Default Re: Tax

All sorted! They had my UK address. Changed to Tavira, all went through with no Tax!
 
Old Jun 19th 2023 | 1:47 am
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Default Re: Tax

Originally Posted by morro
All sorted! They had my UK address. Changed to Tavira, all went through with no Tax!
Thanks for the swift response, although I'm a little puzzled as to how they could have arrived at you owing tax on income from abroad as a non-resident, but not as a resident.

Doesn't get me anywhere either but I'll just have to battle through as best I can.

Glad it all worked out for you in the end, and I suppose that's an indication that it's possibly only the simulator that's broken and not the actual tax calculation process.
 
Old Jun 19th 2023 | 2:38 am
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Default Re: Tax

Only way morro could end up with no tax is with pre-2020 NHR in place.
But, as with many posts, key details are missing.
I cant see how PT tax man wanted 1000 euros, as final bills are not issued until next month. (Simulator?)
 
Old Jun 19th 2023 | 4:59 am
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Default Re: Tax

Originally Posted by EU.flag
Only way morro could end up with no tax is with pre-2020 NHR in place.[...]
No, that's not so.

As outlined by the OP, with a public sector pension from the UK, the double taxation treaty would prevent PT from taxing it and if it was below the UK threshold, neither would the UK. In fact, there are scenarios where substantially more income than the UK threshold can end up being untaxed in either country.
 
Old Jun 19th 2023 | 5:38 pm
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Default Re: Tax

Originally Posted by EU.flag
Only way morro could end up with no tax is with pre-2020 NHR in place.
But, as with many posts, key details are missing.
I cant see how PT tax man wanted 1000 euros, as final bills are not issued until next month. (Simulator?)
I must be one the `lucky ones` as I have already had my tax demand earlier this month
 
Old Jun 19th 2023 | 9:34 pm
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Default Re: Tax

Originally Posted by Red Eric
No, that's not so.

As outlined by the OP, with a public sector pension from the UK, the double taxation treaty would prevent PT from taxing it and if it was below the UK threshold, neither would the UK. In fact, there are scenarios where substantially more income than the UK threshold can end up being untaxed in either country.
Hypothetical example with no NHR.
Public UK pension £20K per year. UK will tax £7.5k at 20%.
PT tax rate is 28%. Tax on £20k-€4K at 8% will be due in PT.
 
Old Jun 19th 2023 | 10:16 pm
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Default Re: Tax

Originally Posted by EU.flag
Hypothetical example with no NHR.
Public UK pension £20K per year. UK will tax £7.5k at 20%.
PT tax rate is 28%. Tax on £20k-€4K at 8% will be due in PT.
No, that's not correct at all.

In this scenario, the UK will indeed tax anything over the personal allowance but no tax is due in PT on this income. The only potential effect it has is on the rate at which other income is taxed. On the PT tax demand document it will show in the category "Rendimentos isentos englobados para determinação da taxa".

The double taxation treaty is explicit on this one :

UK/PORTUGAL INCOME TAX CONVENTION
 
Old Jun 20th 2023 | 3:33 am
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Default Re: Tax

Originally Posted by Red Eric
No, that's not correct at all.

In this scenario, the UK will indeed tax anything over the personal allowance but no tax is due in PT on this income. The only potential effect it has is on the rate at which other income is taxed. On the PT tax demand document it will show in the category "Rendimentos isentos englobados para determinação da taxa".

The double taxation treaty is explicit on this one :

UK/PORTUGAL INCOME TAX CONVENTION
Interesting, I stand corrected, gov pensions can only be tax in source country. Every day is school day. :-)

 
Old Jun 20th 2023 | 4:25 am
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Default Re: Tax

Originally Posted by EU.flag
Interesting, I stand corrected, gov pensions can only be tax in source country. Every day is school day. :-)
Yes - and just to be clear for any other passers-by, it's only in respect of public sector pension schemes and doesn't include state pension, which (along with any private pensions or private sector pension scheme payments) is only taxed in country of residence.
 
Old Jun 21st 2023 | 5:03 am
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Default Re: Tax

Originally Posted by Red Eric
Yes - and just to be clear for any other passers-by, it's only in respect of public sector pension schemes and doesn't include state pension, which (along with any private pensions or private sector pension scheme payments) is only taxed in country of residence.
So if you are considered tax resident in more than one country who has first dibs?
Interestingly the UK tax free allowance is now frozen (well for the minute) until 2028, by which time the basic full state pension with a few increases between now and then will be over the Tax free allowance.
 


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