I am retiring overseas but have a pension from the UK. What tax will I have to pay?
Government Service Pensions
Pensions paid for former service to the UK Government are known as Government Service Pensions or Civil Service Pensions. Pensions paid for former employment with HM Forces, Civil Service and Foreign and Commonwealth Office are all regarded as Government Service Pensions.
If you are still unsure whether you are receiving a Government Service Pension you should contact me giving the name of your former employment and the payer of your pension.
Usually Government Service and Local Authority Service Pensions paid to British nationals living overseas remain taxable in the UK. You will still be eligible to receive full UK Personal Allowances and reliefs.
The main exceptions are Australia, Canada, New Zealand and Cyprus where exemption for Government Service and Local Authority Service Pensions can be claimed.
If you are a national of an overseas country and resident
in an overseas country, exemption under a Double Taxation
Agreement may also be due for a Government or Local Authority
Service Pension.
More information can be found in the DT
Digest.
Local Authority Pensions
The rules regarding the treatment of Local Authority Service pensions under Double Taxation Agreements are very similar to those applicable to UK Government Service Pensions. However not every Double Taxation Agreement is the same. You should refer to the DT Digest or contact us if you need further clarification.
A number of claim forms are already published on the Inland Revenue website. However you may need to contact South Wales Area Residence Group for any forms not published on this website for your claim to be made.
State Pension
The UK State Pension is based on the amount of National Insurance contributions you have paid. Normally it is taxable, but many Double Taxation Agreements allow you to claim exemption from UK income tax for the state pension. More information can be found in the DT Digest.
Stakeholder Pensions
Crown servants (and the spouses of serving Crown servants) who are Not Resident and Not Ordinarily Resident are eligible for stakeholder pensions in the normal way.
National Health Service Pensions
National Health Service Pensions are not regarded as Government service pensions for the purposes of most Double Taxation Agreements.
Many Double Taxation Agreements allow for exemption from
UK income tax to be claimed. Please refer to the DT
Digest or contact
me if you need further information on how to make a claim.
