UK Pensioners

[Chaimai]

On 11/6/2021 at 5:46 PM, Benroon said:

How is it 'earned' ? If it's money taken from a UK registered business so paying you profits etc yes. 

If it's from investments, equities, private pensions (SIPPS) etc then it won't be taxed and you will be paid gross

A lot of people think that ANY money generated in the UK is taxable but that's not the case.

 

Payable gross but I thought it was still part of taxable income.

[gummy]

All UK private pensions are subject to taxation as original contributions were considered as part of non taxable investment ( ie your pension payments were deducted from gross salaries/income totals for tax purposes ). That means that your state pension ( tax free ) together with any private pensions are now subject to tax once the combined total is over the personal allowance.

[Faz]

On 11/6/2021 at 5:46 PM, Benroon said:

If it's from investments, equities, private pensions (SIPPS) etc then it won't be taxed and you will be paid gross

It's taxed at source, I can assure you.

[Benroon]

30 minutes ago, Faz said:

It's taxed at source, I can assure you.

If you mean before it reaches those from your salary etc yes you're right - but it won't be taxed coming from them.

Many things are taxed many times it's one of the main reasons I left the UK, you are absolutely soaked for taxes - I think the no tax day is into May now - meaning up to then everything you earn goes to the government.

[LoongFred]

1 hour ago, gummy said:

All UK private pensions are subject to taxation as original contributions were considered as part of non taxable investment ( ie your pension payments were deducted from gross salaries/income totals for tax purposes ). That means that your state pension ( tax free ) together with any private pensions are now subject to tax once the combined total is over the personal allowance.

Us social security is taxed based on a formula of gross income. That is SS income plus other income = gross income. Below  a certain amount there is no tax. Then over a certain amount but less than another amounts SS counts says 50% taxable. Then over xxx it’s  85%.  If it’s confusing , I agree. 

For those only on SS there is generally no tax. 

Unlike the UK workers pay about 7.5% of there gross pay, up until a cut off and employers also pay a similar amount. It is not an entitlement and amount received is based on the amount paid, but there are caps.

Us tax code is difficult and it’s hard to hit the amount you can withdraw from retirement accounts and not be heavily taxed.

, I

 

1 hour ago, gummy said:

All UK private pensions are subject to taxation as original contributions were considered as part of non taxable investment ( ie your pension payments were deducted from gross salaries/income totals for tax purposes ). That means that your state pension ( tax free ) together with any private pensions are now subject to tax once the combined total is over the personal allowance.

 

[JohninDublin]

On 11/5/2021 at 9:57 AM, Rookiescot said:

I think everyone agrees its unfair. Calling for others to suffer as well seems ridiculous given they will have made contributions to those pension schemes throughout their working lives.

As I alluded to earlier I also pay a lot of tax every month when I receive my company pension even though I am no longer resident in the UK and because I do not yet qualify for a state pension I gain absolutely no benefit at all for paying that tax. What I am doing though is paying for YOUR state pension.

We also do not all pay the same National insurance.

Example

If you’re in category A and you earn £1,000 in a week you’ll pay:

nothing on the first £184

12% (£93.96) on your earnings between £184.01 and £967

2% (£0.66) on the remaining earnings above £967

This means your National Insurance payment will be £94.62 for the week.

Now again this shows the unfairness within the system. It should be a flat rate for all earnings but of course rich people dont want that so earnings above 967 pounds per week the tax rate drops to 2%.

Pretty crap eh?

In 1980, NI contributions were limited to 6.25% on a maximum threshold of £135 per week, about £8.50 per week. I don't remember the exact amount, but if Unemployment Benefit was say £30 per week, you were also allowed another benefit, Earnings Related Supplement, which depending how much earned before you lost your job, could have boosted your UB by up to two-thirds for the first 26 weeks to about £50. per week. ERS was scrapped under Thatcher, and the percentage and thresholds were increased. Now there is no upper limit as you have quite rightly pointed out. 

Vat went from 10% to 12.5% then 15% then 17.5%. It is now at 20%, and apart from temporarily during Covid, it has never been reduced under the Tories. During Brexit, the Daily Express, a pro-Tory paper, started the rumour, that if we left the EU, the gov could scrap VAT, by claiming that this tax was purely about funding our payments to the EU. The truth is that only 6% of this money was spent on the EU, so at best, VAT could only be lowered to 18.8%.

Then of course there was all the Billions raised for N. Sea Oil and Privatisations. To deal with the latter, Privatisations was among the greatest scams ever perpetrated on the tax paying public. I like all UK citizens, used to own a part of BT, the Water Supply, Gas and Electricity boards etc. Then the gov took my share and sold it to someone else who could afford to invest in the biz, even though the shares were usually sold at a substantial discount to their true value. They never gave me a penny for the share they took from me. Regarding N. Sea revenues, the Norwegians invested theirs in what is a now the world's largest sovereign wealth fund. Should the Norwegians have to furlough for years, they can afford.

What did we do with all the money that privatisations oil revenues excess VAT raised? We spent it on tax cuts for the rich. 

[JohninDublin]

On 11/8/2021 at 4:27 AM, LoongFred said:

I now understand why many are grumpy old men and it's nothing to do with Thailand. 

I suspect that Grumpy old men might be even grumpier thinking about barflies in TH having a good time.

[JohninDublin]

5 hours ago, LoongFred said:

I'm starting to understand why some who only receive a UK pension are unhappy.

The unhappiest are the ex-pats living in S. Europe who voted "Leave" to Brexit, and saw their UK pensions slashed 15% against the € the day after. 

Of course, it's an ill wind etc... That same day Chinese who were busily investing in "buy to lets" in London saw the asking  prices fall 15%. What was that about "taking back control of my country"?

[JohninDublin]

4 hours ago, Chaimai said:

Payable gross but I thought it was still part of taxable income.

Tax would depend where you are domiciled. The top rate of tax in TH is 35%. But 45% in the UK. In Monaco. it's 0% for residents.

[Chaimai]

7 hours ago, JohninDubin said:

The unhappiest are the ex-pats living in S. Europe who voted "Leave" to Brexit, and saw their UK pensions slashed 15% against the € the day after. 

Of course, it's an ill wind etc... That same day Chinese who were busily investing in "buy to lets" in London saw the asking  prices fall 15%. What was that about "taking back control of my country"?

The Chinese have no complaints since 

 

I doubt that many expats in living in Europe voted for Brexit......

[Faz]

10 hours ago, Benroon said:

If you mean before it reaches those from your salary etc yes you're right - but it won't be taxed coming from them.

I'm not following what you mean by that.

All income earned in the UK, interest from investments, company and private pensions are taxed at source above the personal allowance limit.  

 

On 11/6/2021 at 1:29 AM, Benroon said:

Declare yourself non resident, that will stop it getting taxed 

UK residents normally pay tax on all their incomes, whether from the UK or abroad.
Non residents still pay tax on UK income - they don't pay tax on foreign income.
https://www.gov.uk/tax-foreign-income/residence

 

 

 

 

[gummy]

57 minutes ago, Faz said:

I'm not following what you mean by that.

All income earned in the UK, interest from investments, company and private pensions are taxed at source above the personal allowance limit.  

UK residents normally pay tax on all their incomes, whether from the UK or abroad.
Non residents still pay tax on UK income - they don't pay tax on foreign income.
https://www.gov.uk/tax-foreign-income/residence

100% correct

[Benroon]

1 hour ago, Faz said:

I'm not following what you mean by that.

All income earned in the UK, interest from investments, company and private pensions are taxed at source above the personal allowance limit.  

UK residents normally pay tax on all their incomes, whether from the UK or abroad.
Non residents still pay tax on UK income - they don't pay tax on foreign income.
https://www.gov.uk/tax-foreign-income/residence

No but it’s a very commonly held view. Rather than go through each entity, let’s say SIPPS as that will affect most. 

If you call HMRC and declare yourself non resident you will get a zero tax code - if you then draw down from your SIPP it will be paid to you GROSS. 
obviously taxed money has built that up but you don’t pay it on the way out as a non resident. 

However, and this is the crucial bit, you are then expected to pay income tax in the country of your new residency ie Thailand (slightly higher than the U.K.) - however when I enquired as to how I go about this, I was told unless I was a business owner I was wasting their time and to go away which is what I was happy to do. 

This has sparked numerous ‘you’re talking bollox’ debates especially amongst older chaps who don’t want to know they’ve paid shedloads in tax they didn’t need to - so one particular older chap desperate to prove me wrong phoned the HMRC who confirmed exactly what I have said above. He was able to claim some back  but nowhere near what he had paid. 

Most accountants also flounder in this area so you’ll do well to find one who knows what he’s talking about when it comes to expat taxation policies. 

[Benroon]

14 minutes ago, gummy said:

100% correct

It’s not mate - see my answer to Faz

[Faz]

5 minutes ago, Benroon said:

No but it’s a very commonly held view. Rather than go through each entity, let’s say SIPPS as that will affect most. 

SIPPS ?

[Benroon]

2 minutes ago, Faz said:

SIPPS ?

Self Invested Personal Pensions or Private Pensions invested in equities!gilts etc  

[Faz]

23 minutes ago, Benroon said:

If you call HMRC and declare yourself non resident you will get a zero tax code - if you then draw down from your SIPP it will be paid to you GROSS. 
obviously taxed money has built that up but you don’t pay it on the way out as a non resident. 

However, and this is the crucial bit, you are then expected to pay income tax in the country of your new residency ie Thailand (slightly higher than the U.K.) - however when I enquired as to how I go about this, I was told unless I was a business owner I was wasting their time and to go away which is what I was happy to do. 

Now I understand your comments.
Indeed you are still expected to pay tax in either the UK or the Country of residence.
The fact Thai Inland revenue turned you away doesn't absolve you of paying tax.

A foreigner in a similar position was asked to provide evidence of paying tax in a different Country by HMRC, 3 years after he drew down on an offshore investment. He couldn't - now they are deducting £50 a week from his state pension + interest.

He led the high life for a while and blew it, now he's on his backside.
HMRC have a penchant for checking even several years later.

[Saltire]

27 minutes ago, Faz said:

Now I understand your comments.
Indeed you are still expected to pay tax in either the UK or the Country of residence.
The fact Thai Inland revenue turned you away doesn't absolve you of paying tax.

A foreigner in a similar position was asked to provide evidence of paying tax in a different Country by HMRC, 3 years after he drew down on an offshore investment. He couldn't - now they are deducting £50 a week from his state pension + interest.

He led the high life for a while and blew it, now he's on his backside.
HMRC have a penchant for checking even several years later.

Agree, I lived off SIPP drawdowns for 5 years during my time living in Cambodia.

It was indeed paid gross but I had to declare it on my tax return and pay the tax. I managed to pay minimal tax by drawing down just enough to cover the personal alllowance. Worked out fone for me. I wasn't working in Cambodia (or in Thailand now) so I have to pay UK tax forever. Resistance is futile!

 

[gummy]

5 hours ago, Faz said:

SIPPS ?

Think you need to understand what the taxation rules were previously when I started drawing on my private 1st pension in 2009.Changes since to pension contributions were not retrospective nor were the same self invested pensions arrangements applicable to my pension arrangements.

[JohninDublin]

8 hours ago, Chaimai said:

The Chinese have no complaints since 

I doubt that many expats in living in Europe voted for Brexit......

I recall a poll following the ref-vote which gave the ex-pat vote at 60%. They seemed to have a disconnect on themselves enjoying free movement, while not being happy about "foruners" being in the UK.

There is a character type that I call "Newham man". Every so often there is a doc on Newham and in particular on the changing demographic of the area. They will walk around areas like Green St while being interviewed, lamenting the fact that there are so many Asians and tell you how much different and better it was when they lived there. On more than one occasion, I've heard them say things like, "Look at it now. I wouldn't wish this place on my worst enemy".

What they never discuss in the docs, is how the demographic changed so much from "White working class" to "Asian undesirable" (their opinion). The answer is that those who took flight did so by buying their Council houses and selling them to the first person who would meet the asking price, and these were most often Asians. 

This is the same mentality that was happy to retire to Spain and vote "Leave". The demographic that voted "leave" were most often retired pensioners. The ex-pats who voted "remain" were mainly those who were working in the EU. Like so many others, those who voted "leave", when told that £ would crash, decided that it was all part of "project fear".

[LoongFred]

43 minutes ago, gummy said:

Think you need to understand what the taxation rules were previously when I started drawing on my private 1st pension in 2009.Changes since to pension contributions were not retrospective nor were the same self invested pensions arrangements applicable to my pension arrangements.

It seams like your system socks for expats.

[Faz]

1 hour ago, gummy said:

Think you need to understand what the taxation rules were previously when I started drawing on my private 1st pension in 2009.Changes since to pension contributions were not retrospective nor were the same self invested pensions arrangements applicable to my pension arrangements.

Understand the old and new, but SIPPS was a new abbreviation I wasn't familiar with and which google didn't find the answer either. 

I started drawing on my private pension just before the changes were taking place giving people greater freedom and choice in the options available to them when accessing their pension savings. ( 2015). To many plans were in place for me to wait 3 months and take advantage. I suspect as you did, I was only able to take the 25% tax free lump sum.

 

[Faz]

1 hour ago, LoongFred said:

It seams like your system socks for expats.

Fred, you do realise the topic is UK (United Kingdom) Pensioners.

Your comments and comparison to US (United States) Pensions is wildly 'off topic'.
Open a new topic if you wish to discuss US Pensions.

[Chaimai]

1 hour ago, JohninDubin said:

I recall a poll following the ref-vote which gave the ex-pat vote at 60%. They seemed to have a disconnect on themselves enjoying free movement, while not being happy about "foruners" being in the UK.

There is a character type that I call "Newham man". Every so often there is a doc on Newham and in particular on the changing demographic of the area. They will walk around areas like Green St while being interviewed, lamenting the fact that there are so many Asians and tell you how much different and better it was when they lived there. On more than one occasion, I've heard them say things like, "Look at it now. I wouldn't wish this place on my worst enemy".

What they never discuss in the docs, is how the demographic changed so much from "White working class" to "Asian undesirable" (their opinion). The answer is that those who took flight did so by buying their Council houses and selling them to the first person who would meet the asking price, and these were most often Asians. 

This is the same mentality that was happy to retire to Spain and vote "Leave". The demographic that voted "leave" were most often retired pensioners. The ex-pats who voted "remain" were mainly those who were working in the EU. Like so many others, those who voted "leave", when told that £ would crash, decided that it was all part of "project fear".

 

I used to have a place in Spain and, whilst I was a keen Brexiteer, self-interest would have challenged me a bit. Brexit and European expat life are not a comfortable fit.

 

That said, my point was always that I did not want to leave Europe (a place I love) but I certainly wanted to leave the beast that the EU had become. 

 

You can't always can rarely have your cake and eat it!

[LoongFred]

24 minutes ago, Faz said:

Fred, you do realise the topic is UK (United Kingdom) Pensioners.

Your comments and comparison to US (United States) Pensions is wildly 'off topic'.
Open a new topic if you wish to discuss US Pensions.

OK I got a little off topic.