Thread: UK pensions taxed at 20%?

Only of interest to UK persons but it seems the govt are thinking of taking our personal tax allowances away if you are non resident- give you a pension then take 20% back in 'tax' as well as taxing all your other income even if well under 10K, thieving bastards!

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

"To ensure the UK personal allowance remains well targeted, the government intends to consult on whether and how the allowance could be restricted to UK residents and those living overseas who have strong economic connections in the UK, as is the case in many other countries, including most of the EU."

Simples. Break them.

Harry, at present British Nationals receive £ 10,000 (sometimes more)of their pension from the UK without paying tax. What Cameron is saying is that he is considering removing that £ 10,000 allowance unless the ex-pat has "strong economic ties" with the UK. That essentially means a business or other taxable income.

It would reduce the income of many pensioners overseas by a straight £ 2,000 per annum.

Problem is such a move is popular with the electorate who tend to be envious of ex pats who are seen as having their cake and eating it and all being well off. A 20% reduction of income would see many reduced to poverty levels, especially after the slashing of interest rates and exchange rates, this proposal is draconian.

Originally Posted by harrybarracuda

those living overseas who have strong economic connections in the UK

I receive 2 government pensions, earned in the service of the crown. Does this equate to a 'strong economic connection'? I fear the worst.

I think strong economic connection will not mean poor folks.

Originally Posted by Thormaturge

On the one hand I would say this is a distinct possibility since the allowance used to be available to anyone from the British Commonwealth, but that was stopped back in 2010.

That said, if the allowance were withdrawn from British Nationals living overseas it would force many pensioners to return to the UK where they would be a drain on the social security system...

100% of pensions paid to UK residents are recycled into the UK economy. 100% of expat pensions are lost to the economy forever. The added burden on the use of social services probably does not offset that benefit, especially given that a lot of sick/terminal expats would go home at that point anyway..

But pensions are not given because they will be spent at home, they are given for 35 years contributions, why should they then be taxed just because you chose to spend it where you choose?

Originally Posted by xanax

But pensions are not given because they will be spent at home, they are given for 35 years contributions, why should they then be taxed just because you chose to spend it where you choose?

Is the UK pension system funded by contributions or paid out of general revenue?
It's not superannuation is it?
It's a social handout so society doesn't have to look at old grannies starving in the gutter. More of a tax break to supermarkets and pharmacies than anything else.

Pensions should never be taxed at any rate for any reason ever, anyways...

What's next? Maybe they'll think of a way of taking your money you've paid tax on all your life (various layers of tax) once you are dead...

Well they gotta pay for all those 'asylum seekers' that are such a benefit to the economy, stealing money from poor pensioners abroad seems an easy target. Might not be so bad if the pension levels were up to EU levels anyway, as it is they are about the lowest.

^ & they have to pay for the banker's multi-million pound bonuses...

Originally Posted by Necron99

Is the UK pension system funded by contributions or paid out of general revenue?

The state pension is awarded to those who have contributed throughout their working lives based on the number of years NI contributions.
Income tax relief applies to all earned income. State and private pension schemes are equally liable for tax and relief. For now anyway.

Originally Posted by chassamui

Originally Posted by Necron99

Is the UK pension system funded by contributions or paid out of general revenue?

The state pension is awarded to those who have contributed throughout their working lives based on the number of years NI contributions.
Income tax relief applies to all earned income. State and private pension schemes are equally liable for tax and relief. For now anyway.

.

Exactly. In order to qualify for the full pension a person must have made 30 years worth of National Insurance Contributions. That said, this is not about taxing the pension since it is already taxed. It is about whether expatriates should be granted a personal tax allowance in the same way as a British resident since all pensions paid from government funds are already taxable in the UK. It is simply whether the first £ 10,000 should be tax-free.

^
I would support withdrawing the allowance for expatriates if the State pension were made tax-free.

Originally Posted by xanax

Only of interest to UK persons but it seems the govt are thinking of taking our personal tax allowances away if you are non resident- give you a pension then take 20% back in 'tax' as well as taxing all your other income even if well under 10K, thieving bastards!

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

Whining liberal. A government big enough to give you everything you want, is also big enough to take away everything you have, didn't you know? Free people don't depend on the government.

Originally Posted by Thormaturge

I would support withdrawing the allowance for expatriates if the State pension were made tax-free.

Can't find any loopholes in that.

Originally Posted by Rainfall

Whining liberal. A government big enough to give you everything you want, is also big enough to take away everything you have, didn't you know? Free people don't depend on the government.

I thought you would have been a supporter of the social welfare construct? Parity for all and that.

Originally Posted by chassamui

Originally Posted by Thormaturge

I would support withdrawing the allowance for expatriates if the State pension were made tax-free.

Can't find any loopholes in that.

I will expand this by saying that we have paid for that pension through thirty years of contributions, it is not a "handout", and if we are no longer living in the UK why the heck should we pay tax on the pension there? Are expatriate pensioners now supposed to support the elongated queue of scroungers in the UK with their hands out?

Originally Posted by Thormaturge

Are expatriate pensioners now supposed to support the elongated queue of scroungers in the UK with their hands out?

Appears so...................

It will need to be 35 years contributions from 2016, then you get screwed.

They brought all these immigrants over - currently 500,000 a year - they said they were needed, as Britain had an aging population, to pay for the old folk.

Turns out many don't work , those that do get tax allowances + child tax credit- working tax credit etc, so pay NO tax .

So in the end the pensioners are having to support the immigrants not vice versa.

Don't worry, Blue. When you die (most likely of stress related illnesses like meself...), they will take 40% of everything you had left, to continue paying for those folks you are so fond of...