Expat tax breaks threatened by UK 2014 Budget announcement
|Published:||25 Mar at 6 PM|
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At present, expats working overseas and pensioners with investments and state and private pensions are allowed an annual income of £10,000 before being taxed on sums above that amount. According to Chancellor George Osbourne in his budget speech, the allowances are to be examined and could be cancelled for non-resident expats living overseas who no longer have strong economic ties to the UK.
The allowance for UK residents and expats with proveable ongoing connections to Britain is apparently not at risk, but those who are no longer deemed resident for tax purposes may lose their allowances. Tax consultants believe that those living in the EU may be exempted, but retirees and workers in other popular expat destination such as Australia, Canada and the US could face changes.
The worst scenario is that retirees now living outside the EU on frozen UK state pensions of around £5,500 per year at the present rate may be taxed on their pensions, as would pensioners who left the UK years earlier and whose state pensions are worth far less. In addition, those who have income from buy-to-let properties in the UK are likely to be hit.
According to experts in the sector, it seems unlikely that the full allowance will be withdrawn, but even a small reduction in the state pension through tax would be disastrous for many. It seems that, unable to control immigration and the social benefits given to new arrivals, the present government is determined to assault expats who are in no position to hit back in spite of having paid social contributions for their entire working lives.
Comments » There are 5 comments
Guess I'll just have to do what about 80% of ex-pats do and use one of my children's UK addresses and receive full up-rated pensions, winter fuel allowance and, now, tax allowances. What a way to treat those who compulsorily contributed to the NI fund all their lives and many of whom still pay UK income tax
Does this include public sector pensions? I'm looking ot retire next year and had done all the sums. now Osborne seems to be driving a coach and horses through my plans. i only had a small teachers pension to come anyway, but it would have really helped out here in Thailand. now, I guess I'd be better off taking more as lump sum. It is not fair to tinker with peoples pensions without adequate notice.
Disgusting!! How can Osborne even think about this!! We get NO increases in the Pensions received, we are ZERO burden to the UK and now he wants to take away the little that we get - Think again Mr Osborne. We can still vote!!
If they are considering doing that, then ring fence things for those already abroad, others still residing in the UK can then make an informed choice. Persons receiving public service pensions are obliged by current regulations to pay their income tax in the UK anyway, so should keep their allowances. Mr Osbourne cannot have his cake and eat it. Again its us Uk residents who have worked hard, saved hard all our lives who now have to pay the price to fund all our worldly wars, and help out every other country in the world. Why don\'t we look after our own.
Two questions. As a teacher who retired to thailand 18 years ago will I loose the tax relief on my teachers pension if the proposed changes proceed ? Can I open a uk bank account and use my daughters UK address as my address for all of my mail will this be legal ?