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Change approved to UK Pensions

Change approved to UK Pensions

Old Aug 5th 2014, 8:48 am
  #46  
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Default Re: Change approved to UK Pensions

They are not being taxed twice but are not being given two full tax allowances, the way I read this recent post#34 is that the UK intend to apply the same to foreigners becoming resident in the UK in the future.
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Old Aug 6th 2014, 9:25 am
  #47  
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Default Re: Change approved to UK Pensions - NEW Spin

Originally Posted by Jon-Bxl

UK Budget 2014

20th March 2014

Although not announced in the chancellor’s speech. There are a number of reforms to pensions that will directly affect UK non residents.

If you are in a Final Salary, also known as a Defined Benefit pension scheme. Take note the option to transfer your pension is to be removed.

The Government also intends to abolish tax allowances for non UK residents. So pension benefits you take in the UK would be taxed up to the full marginal rate.The current maximum rate is 45%.

Without a UK tax allowance, you will now pay tax on the whole amount.

Expat tax break threatened, spelling bad news for pensioners - Telegraph

Looks like the abolition of UK tax allowances would not apply to expats in the EU.
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Old Aug 6th 2014, 8:16 pm
  #48  
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Default Re: Change approved to UK Pensions

Good enough reason for pensioners in or thinking about the EU not to vote UKIP!
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Old Aug 6th 2014, 9:15 pm
  #49  
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Default Re: Change approved to UK Pensions

Or another reason for current non residents to remain so as so many changes / potential changes both UK and Spain that this is not a time to make Ill thought through decisions. The ripples of the 2008 shock wave have not calmed yet.
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Old Aug 6th 2014, 9:27 pm
  #50  
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Default Re: Change approved to UK Pensions

It does seem a bit rich though for those that have government pensions many of whom are ex service people who may well have been prepared to lay down their life in service of their country. As a government pension holder they must pay UK tax as not allowed to do otherwise but if following this consultation should this come into force they would get no allowance. Unless possibly this is what is meant by "strong economic connection to the Uk" I realise probably not applying to EU but many are retired elsewhere that would be affected.
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Old Aug 12th 2014, 2:34 am
  #51  
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Default Re: Change approved to UK Pensions

Try reading the government consultation document (if you can bear it!)

https://www.gov.uk/government/consul...onal-allowance
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Old Aug 12th 2014, 4:38 am
  #52  
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Default Re: Change approved to UK Pensions

From the Telegraph article ............

Tax experts believe the personal allowance will still be made available to Britons living in the EU, but other countries could face changes. These include destinations such as the US and Australia which are popular with British expats.
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Old Aug 12th 2014, 7:10 pm
  #53  
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Default Re: Change approved to UK Pensions

Spotted on another Forum (lets hope this take on it is correct)http://citizensadvice.org.es/another...raid-expats-2/
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Old Aug 13th 2014, 3:29 am
  #54  
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Default Re: Change approved to UK Pensions

Reading sect 6 of the consultation document it seems to me to read that those with income from Government sourced pensions which must be taxed in the UK will retain the tax relief even outside the EU. Which seems sensible given they have no choice in where tax on that pension is paid. As for the rest of it well first highlighted paragraph had the word fairness in it, I always read that as being a code for someone is going to loose their eye teeth in government talk.
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Old Aug 13th 2014, 9:02 am
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Default Re: Change approved to UK Pensions

If someone has a small Govnt pension, and a state pension, ( declared in Spain, but not exempted from UK tax)which together come under the tax threshold, if the UK allowance is restricted to those on Govnt pension, would the state pension then be taxed in UK, and therefore have to be exempted.
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Old Nov 7th 2014, 8:51 pm
  #56  
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Default Re: Change approved to UK Pensions - NEW Spin

UK Budget 2014

20th March 2014

Although not announced in the chancellor’s speech. There are a number of reforms to pensions that will directly affect UK non residents.

If you are in a Final Salary, also known as a Defined Benefit pension scheme. Take note the option to transfer your pension is to be removed.

The Government also intends to abolish tax allowances for non UK residents. So pension benefits you take in the UK would be taxed up to the full marginal rate.The current maximum rate is 45%.

Without a UK tax allowance, you will now pay tax on the whole amount.

[/QUOTE]

Not quite true - For now, only government backed final salary schemes are to be banned from transferring from the April 2015 deadline. That's the MOD, NHS, Police, teachers etc. Private defined benefit schemes, although under review, will still be allowed.
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Old Nov 7th 2014, 10:04 pm
  #57  
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Default Re: Change approved to UK Pensions - NEW Spin

Originally Posted by Patrick2976
UK Budget 2014

20th March 2014

Although not announced in the chancellor’s speech. There are a number of reforms to pensions that will directly affect UK non residents.

If you are in a Final Salary, also known as a Defined Benefit pension scheme. Take note the option to transfer your pension is to be removed.

The Government also intends to abolish tax allowances for non UK residents. So pension benefits you take in the UK would be taxed up to the full marginal rate.The current maximum rate is 45%.

Without a UK tax allowance, you will now pay tax on the whole amount.

Not quite true - For now, only government backed final salary schemes are to be banned from transferring from the April 2015 deadline. That's the MOD, NHS, Police, teachers etc. Private defined benefit schemes, although under review, will still be allowed.[/QUOTE]

Thanks for the update... do you now what the new rules are for PRIVATE pensions, and the status of expats on drawdowns and tax, please?
Jon
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Old Nov 8th 2014, 12:07 am
  #58  
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Default Re: Change approved to UK Pensions

I heard today that widows receiving military pensions will not have them withdrawn if they marry again.
I bet that's not the same with the ordinary widows pension
I don't think widows should expect to keep the pension, they are not a widow any more.
The money could be better spent
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Old Nov 8th 2014, 12:09 am
  #59  
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Default Re: Change approved to UK Pensions - NEW Spin

Originally Posted by Jon-Bxl
Not quite true - For now, only government backed final salary schemes are to be banned from transferring from the April 2015 deadline. That's the MOD, NHS, Police, teachers etc. Private defined benefit schemes, although under review, will still be allowed.

Thanks for the update... do you now what the new rules are for PRIVATE pensions, and the status of expats on drawdowns and tax, please?
Jon
[/QUOTE]

For private pensions you may be able to take advantage of the new flexible (or 'uncapped') drawdown rules announced in the March 2014 UK budget. This allows you to access all of your pension as long as there is provision left in place for a £12,000 per annum guaranteed income (usually made up of state pension plus a purchased annuity). In broad strokes (depending on your age and personal circumstances) that will equate to somewhere between £100,000 - £150,000 being used to buy an annuity at today's rates. Also you have to be aware that, after the current 25% tax free allowance, lump sums and withdrawals will be taxed at marginal rates - up to 45% (the Governments obvious agenda is extra tax revenue - a little short sighted of them you could argue). Further, most UK providers are saying they will tax at source. The other big change is the reducing of the 55% death charge on UK pensions to 45% for the over 75s (defined contribution pensions, if you die before 75, can now be passed on to beneficiaries tax free). There are plans in 2016 to reduce to marginal rates but given that most people will die after 75 and beneficiaries are likely to take the lump sum that's still a potential tax of 45% on your pension before it's passed on to your family/beneficiaries.
In Spain, drawdown from UK private pensions is taxed as income. You can benefit from much reduced rates if you have bought an annuity or have a temporary annuity certificate from a QROPS overseas pension. Be aware that Hacienda are looking into undeclared pension income from abroad and although there is an amnesty from January 2015 for 6 months they will be collecting back taxes - just no fines. For now. Hope that helps.
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Old Nov 8th 2014, 5:45 am
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Default Re: Change approved to UK Pensions

Also remember that if you are tax resident in Spain, lump sums are taxable in Spain but the tax on annuities is much lower than the UK tax on the same annuity - typically you only pay tax on 25% of the income and that is treated as savings income which is less than the normal income tax rate.
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