Taxation ...and the taxman....
Join Date: Mar 2003
Location: Australia
Posts: 398
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Of course, you have to pay U.K. tax on (90% of), your foreign pension, but...
While on the subject, anyone any good ideas how I can legally avoid paying tax on my UK pension overseas, especially as it is worth so little that as of next year I will not need to pay UK tax on it?
Y_G
UK Tax On Government Sourced Pensions
Yeller Gait
Everything you need to know is on the HMRC website. Look for the Dual Taxation Agreement (DTA) between the UK and the country you are now a resident of. In the case of government sourced pensions (eg Armed Forces), you have to pay tax on it in the UK unless stated otherwise in the DTA. In my case (USA), the UK-USA DTA states that you may cease to pay tax on UK government sourced pensions (and pay in the US instead - clearly advantageous) once you have become a citizen of the US (normally takes a minimum of 5 years). I have checked with HMRC and confirmed that it is not necessary to also renounce UK citizenship to do this and that one would also still continue to receive the UK senior citizen pension in due course (provided the requisite contributions had been maintained).
Everything you need to know is on the HMRC website. Look for the Dual Taxation Agreement (DTA) between the UK and the country you are now a resident of. In the case of government sourced pensions (eg Armed Forces), you have to pay tax on it in the UK unless stated otherwise in the DTA. In my case (USA), the UK-USA DTA states that you may cease to pay tax on UK government sourced pensions (and pay in the US instead - clearly advantageous) once you have become a citizen of the US (normally takes a minimum of 5 years). I have checked with HMRC and confirmed that it is not necessary to also renounce UK citizenship to do this and that one would also still continue to receive the UK senior citizen pension in due course (provided the requisite contributions had been maintained).
