Tax rebate

[nidnoyham 30]

Just had a call from a mate in LOS. He want's to claim back income tax, on his company pension.

 

I am sure there was a post about this. I have searched without any luck.

 

He is determined to see his time out in LOS, and would apreciate the extra money.

If he does, must he show them he's a tax payer in LOS ?

 

Any info' would be apreciated- thanks NNH

[Eneukman 1]

Just had a call from a mate in LOS. He want's to claim back income tax, on his company pension.

 

I am sure there was a post about this. I have searched without any luck.

 

He is determined to see his time out in LOS, and would apreciate the extra money.

If he does, must he show them he's a tax payer in LOS ?

 

Any info' would be apreciated- thanks NNH

I made enquiries with the Inland Revenue on this point before I moved out in June of last year and I'm afraid it's not good news for your friend. As I was told it (whether it's correct or not is another matter ), there is no double taxation agreement between the UK and Thailand therefore your UK pension HAS to be taxed in the UK. From some investigations I did at the time, the tax charge on his pension is probably lower in the UK than it would be in Thailand.

 

If anyone knows any different though, I'd be very interested.

 

Alan

[nidnoyham 30]

Thanks Alan,

 

From memory, that was stated in the previous post. He was hoping to get it back dated 2 years and cop a few bob.

 

Ah well, death and taxes. The great unavoidables.

[mike100 0]

I got a tax rebate of around £650 for part income tax paid, prior to moving here.

Also got a rebate on my small private pension after months of my daughter hassling them from the UK, and then the pension was paid tax free to my UK bank account.

 

I informed them of my intended move a few months before I relocated and filled out the necessary form they sent me.

The whole process took about 8 months, but was sorted out eventually.

The same for the interest on my Building society account, but this took one year without any rebates on the tax paid during that time, way over £1,000.

 

One thing is for sure, if my daughter had not hassled them constantly, I would probably not have received anything.

 

Mike.

Edited January 5, 2006 by mike100

[nidnoyham 30]

Hmm...

The thing is Mike, he is hoping to get a 2 year backdated refund. This would be his first contact with the I.R. How does he prove he has been in LOS for 2 years ? Do you pay any tax on your company pension at all ?

[Bazle 1,501]

Below is what I posted in October 2004. Subsequent to this posting, Alan has been told exactly the same thing by the UK tax people.

 

Your mate might be entitled to a tax refund if the tax code applied to his pension has been inadequate. Assuming he is a Brit, he is still entitled to a personal allowance each year and it is just possible that it has not been given in his code number. Apart from that, he is not entitled to a refund - resident in LOS or not.

 

 

Think I've got to the bottom of this now!! A warning: you will need to be seriously interested in this subject to justify getting the headache that will ensue from reading on!!

 

One of the fundamental rules of tax is that income is taxed in the country in which it arises. A second rule is that anything agreed by two countries and embodied in a tax treaty overrides the domestic laws of those countries.

 

With regard to an employment pension from a UK source paid to someone resident outside the UK, the UK’s right to tax it is usually overridden by the tax treaty between the UK and the country in which the pensioner is resident. Most double tax treaties give taxing rights to the country of the pensioner’s residence, and thus take them away from the country of source of the pension.

 

However, the tax treaty between the UK and Thailand is very unusual. Not only is there no mention of the taxation of pensions but also there is no “other income” article. There is usually a “sweeping up” article which says that if anything hasn’t been specifically mentioned in the treaty, then it is taxable only in the country of the individual’s residence.

 

The consequence of all of this is that a UK pension paid to a Thailand resident is taxable in the UK. Furthermore, it MIGHT also be taxable in Thailand. It is my understanding that Thailand taxes non-Thailand income arising to a Thailand resident on a “remittance” basis – i.e. it is taxed only to the extent it is taken into Thailand. Therefore, if the UK pension is taken into Thailand, it will be taxed there. However, the Thai tax authorities are almost certain to permit a credit against the Thailand liability for UK tax suffered on the pension remitted. It would probably be best to keep life simple and not remit the pension.

 

It would be great if the UK Revenue could be persuaded to forget about tax on the pension. You would think that if you had no other UK income, were not resident in the UK and were not filing a UK tax return, you could manage to achieve this. Regrettably, the pension payer will be required to withhold PAYE, except in circumstances which will not apply to most of us. Those circumstances are that (i) the pension comes about from an employment carried out abroad either for (at least) the last 10 years of service, or (ii) of the total service, at least half was abroad and at least 10 of the last 20 years.

 

The bottom line is that unless some local Inland Revenue office makes an error and instructs that PAYE need not be withheld, we are stuffed!! The only thing we can do is to make sure all other income arises outside the UK, and it is only the pension which is taxable. That will enable the personal allowance and the lower rates of tax to be set against the pension income to get the overall tax rate down as low as possible.

[nidnoyham 30]

Thanks Bazle.

 

I don't really want to get into a long drawn out 20 questions with the I.R. I'll tell him it's not possible. Although we worked for a Canadian Company in the U.K. the pension scheme and contributions were handled locally in U.K.

 

Cheers