Getting Tax Stopped/Refunded on UK Service pension.

[Hueymeister]

Living overseas and have a question; has anyone dealt with Equiniti/HMRC with regards to this recently? Any advice gratefully received.

Huey.

[Davey Emcee]

It depends if your country of residence has a "double taxation agreement" with the UK.

[Hueymeister]

I’m in Canada. I know they do it, just wandering if anyone has recent experience getting it sorted recently.

[MPN11]

Been there, done that, but of course in the specific context of Jersey/UK dual taxation. IIRC most of the paperwork, including the UK Form "DT-Individual", was processed in Jersey. As the rules here and there kept changing, it's hard for me to offer any help!

[Janda]

I lived in New Zealand for 24 years all of which I received my RAF pension. I found it was cheaper to pay UK tax than NZ which is charged from dollar 1. You may be aware that you can reduce your tax bill if you have a wife/partner who has a been a UK tax payer and is not using their allowance. https://www.gov.uk/marriage-allowance

[ForcesPensionSociety]

There is an article in this copy of Pathfinder that has the link to the form for those who live in Canada to be exempt from UK tax on their AFPS benefits:

https://cloud.3dissue.com/6374/7271/15135/PathfinderAugust17/index.html

[Not Long Here]

I lived in New Zealand for 24 years all of which I received my RAF pension. I found it was cheaper to pay UK tax than NZ which is charged from dollar 1. You may be aware that you can reduce your tax bill if you have a wife/partner who has a been a UK tax payer and is not using their allowance. https://www.gov.uk/marriage-allowance

So you actually owe the New Zealand IRD a lot of back tax as, if you are resident in NZ your worldwide income should be declared to the IRD and taxed accordingly. If you have already paid some UK tax the IRD take this into account and tax the difference so you don't pay tax twice. The best solution for me was to write to HMRC who agreed to waive UK tax and sent me the appropriate form which was sent back to HMRC via the IRD.

This means I only have to deal with one tax authority.

[RAFEngO74to09]

Once you are a citizen of the the country you want to pay tax in, follow the procedure in the HMRC Double Taxation Agreement for the country in question (all available on line).

This will involve providing proof of citizenship and the necessary certification from the tax agency in your new country on a specified form - in my case IRS in the USA.

Send to HMRC.

Once agreed, you will get a confirmation letter from the HMRC with advice that you need to inform them if you change your residency status.

HMRC will automatically process the refund for any part year already paid in the UK.

HMRC will send a "NT" (No Tax) code to Equiniti.

You will need to inform any UK banking institutions that deduct tax on interest.

Note that Equiniti are likely to screw up and start charging tax when any additional pension kicks in - in my case RFPS05 for FTRS after AFPS75 for Regular service I was already receiving at NT.

If this happens, they will try saying "we are only doing what HMRC told us". Call HMRC, explain what transpired - quote your NT confirmation letter - and they will e-mail "NT" notification to Equiniti again. Sorted within a few days.

All the above took about 4 months (6 years ago) - the main log jam being the queue for the IRS certification.

[Janda]

Not true NLH. My tax returns were prepared by an expert who advised me to pay 10% tax in UK as opposed to paying the top rate tax in NZ. A small portion of my UK income was then subject to this higher rate. However, I saved over $1500 per year.

[Tengah Type]

I live in France and in March 2015 asked HMRC about choosing where to pay tax. They replied with a copy of the France/UK Double Taxation claim form. They also told me "Please note that your Government pensions will remain taxable in the UK". Has this changed?

[RAFEngO74to09]

I live in France and in March 2015 asked HMRC about choosing where to pay tax. They replied with a copy of the France/UK Double Taxation claim form. They also told me "Please note that your Government pensions will remain taxable in the UK". Has this changed?
Government pensions remain taxable in the UK until you become a citizen of another country that has a Double Taxation Agreement with the UK. Then the choice is up to you provided you meet the requirements in the Double Taxation Agreement.

[Bunker Shot]

Hueymeister

Check your PMs

[MPN11]

Government pensions remain taxable in the UK until you become a citizen of another country that has a Double Taxation Agreement with the UK. Then the choice is up to you provided you meet the requirements in the Double Taxation Agreement.
Or, in our case resident.
Still registered Overseas Voters, and British Citizens, but resident elsewhere. It was briefly difficult to unravel the Double Taxation.
But Jersey is an outlier ... British, but was never in the EU!

Only an individual’s local policies provide the answer.

[Not Long Here]

Not true NLH. My tax returns were prepared by an expert who advised me to pay 10% tax in UK as opposed to paying the top rate tax in NZ. A small portion of my UK income was then subject to this higher rate. However, I saved over $1500 per year.

You wouldn't get away with that now. Say your RAF Pension was $40,000 and you paid that UK tax of 10% ie $4,000. You would have to declare to the NZ IRD that $40,000 income and also declare that you had already paid $4,000 tax in the UK. For simplicity, if the Pension fell into the bracket where the NZ tax rate is 30% your tax liability in NZ would be (40,000 x 30%) - 4,000 ie $8,000.
That's the purpose of the double taxation agreement.

[Tengah Type]

RAFEngO74to09 & MPN11

Thank you for that information. Rather than eat more garlic and snails I will stay British. Anyway, I am still waiting for the Residency Permit I requested in January 2019!!
However, I will still keep drinking the excellent wine we have down here in the Medoc.

[billyt]

Janda, NLH is 100% correct. Your advice was probably correct for the UK liability but not the NZ liability.