UK government to strip personal tax allowance from expats overseas
|Published:||12 Aug at 6 PM|
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The proposal, hinted at during the Chancellor’s March 2014 Budget speech, has now been released for formal consultation and, if passed, will be brought in next year. At present, EU nationals and UK expats living or working overseas can offset income earned in Britain against the basic £10,000 personal tax allowance.
Expats with buy-to-rent properties or those who are letting their UK homes will lose the right to set profits against their personal allowances, and retirees on state pensions are likely to be the worst affected, especially if they’ve chosen to live in a country where their pension is frozen.
The personal allowance will only be retained by expats with an ongoing, strong connection to the UK, with the move expected to raise some £400 million annually for the government. Those who are resident for tax purposes, those who spend at least six months every year in the UK and those whose country of residence has a tax treaty with the UK may also be able to retain the allowance.
However, former civil servants, council officials and medical professionals who’ve worked in the NHS are likely to be hit by the tax changes, as are former missionaries and retired British diplomats. Accountancy firms are recommending that their expat buy-to-let clients sell their UK properties and invest overseas.
As usual with the British government’s changes, pensioners living abroad are expected to be the worst affected. Experts consider that the move may result in thousands already living frugally deciding to return to the UK and throw themselves on the dubious mercy of the state.
According to the Treasury, no decision has been made as yet, and expat organisations are hoping that the move may concentrate on expat earnings in the UK rather than on the basic state pension paid to UK citizens living overseas.
Comments » There are 4 comments
Does not surprise me at all!!! Having already disenfranchised by the government we expat pensioners are easy pickings. I suppose we must hope that the EU object to this
Hi Absolutely astonished and very angry and yes picking on the ones who most need the pension they have contributed 40 years or more. Yes the easy touch and ofcourse many pensioners already disgustingly continuing to receive frozen pensions. Absolutely disgusting and all these people flooding in to the UK and getting every benefit possible, with paying one penny in.
My total income in Thailand comes from UK pensions and is little over 10,000 pounds per annum. This is enough for a decent standard of living in this country and enough (with a top up savings account) to satisfy immigration requirements. A 20% drop in my income, would put considerable strain on my cost of living and would not satisfy immigration. I would have to move, and as the same situation would apply in most other foreign countries, I would return to the UK like a refugee.
I thought it was being proposed that expats that derive 75% to 90% of their income from the UK would retain the allowance. Does this not include pensioners?