# Uk gov thinking of withdrawing expat personal allowances



## JaneyO (Sep 24, 2012)

2014 budget says they are going to look at withdrawing uk tax allowances for expats. We need to object. Quick.


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## In 2 bikes (Apr 18, 2013)

Hmmmmmm !! 

A big pinch of salt. But here is some reading for those who are now panicking

Expat tax breaks threatened by UK 2014 Budget announcement - Expat News at ExpatsBlog.com

This is the critical statement "*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*". -


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## JaneyO (Sep 24, 2012)

In 2 bikes said:


> Hmmmmmm !!
> 
> A big pinch of salt. But here is some reading for those who are now panicking
> 
> ...


I saw that but I don't trust them as in thin ends, wedges etc. I really object to the terminology 'expat tax breaks' like we're getting something everybody else isn't. I would be interested to hear what the Eu make of it. I imagine the Spanish govt will not be delighted to hear I'm not paying them my Euro xxxx any more cos I already paid it in uk under double taxation treaty. Or armies of bureaucrats will be paid to 'claim it back'


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## hils (Sep 12, 2009)

Sorry to be naive, but what tax breaks or allowances are they talking about?

My private pension is in the UK sent annually to my bank account here, taxed here in France. I don't qualify for State Pension yet. So my Private Pension is my only UK revenue (and doesn't touch the sides in the UK) and I have long been non-UK-tax-resident.

So what are the real implications, please?


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## In 2 bikes (Apr 18, 2013)

Today's, U.K.,news focussed on UK tax payers stashing their dosh in 'off shore' accounts and not declaring it to HMRC. The Gvnmnt has changed the law very recently and that states the Government now only needs to prove you have money abroad and haven't declared it to them. If that is the case, that individual will be adding to the 1.5 billion Sterling that the UK Government has already recovered from such a 'clever' tax savvie person. Watch out !!


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## Bevdeforges (Nov 16, 2007)

I'd like to echo Hils' comments. Once you are considered "non-tax resident" in the UK, what allowances are there? It's my understanding that as a non-tax resident, you only pay UK tax on UK-source income - as a non-resident at that.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

In reading the press reporting, there's a tax free personal allowance of £10,000 (increasing to £10,500) that applies to practically everyone. To keep it simple let's suppose you're living in a Middle Eastern country with zero income taxes. You receive £10,000 of U.K. source income. At present the personal allowance applies to you, and you don't pay U.K. income tax (nor foreign tax in this example). If a change is made you will pay U.K. income tax on that income from the first pound.

At least, that's how I understand it from the press articles. Evidently this change would affect nonresidents with U.K. source income that live in comparatively lower tax jurisdictions or that are covered by tax treaties that protect that U.K. source income.

If this change happens it'll be a regressive tax increase overall. I'm certainly not in favor of regressive tax increases.


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## In 2 bikes (Apr 18, 2013)

It appears only to be a theory at this stage and will not include U.K. expats who reside elsewhere in the E.U.

It would be particularly stressful for early retirees who are surviving on a U.K. (none state ) pension, say U.K. Forces or Emergency Services for example. 

Such an individual might be presently receiving £20k in an annual U.K. Government pension, £10.5k of which is tax exempt, making roughly an annual income of £18k after tax. If the whole lot was taxed the annual income would drop to £16k, give or take. 

U.K. Government pensions have to be taxed by the U.K. H.M.R.C. and cannot be moved to another country in an attempt to duck in to a lower tax regime.

Bit of a bugga !!


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## BBCWatcher (Dec 28, 2012)

As I understand it, the U.K. national pension already freezes cost of living adjustments for U.K. expatriates, and that's a significant penalty. It's at least borderline evil, I'd argue.


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## JaneyO (Sep 24, 2012)

BBCWatcher said:


> As I understand it, the U.K. national pension already freezes cost of living adjustments for U.K. expatriates, and that's a significant penalty. It's at least borderline evil, I'd argue.


For those of us who only have a state pension which is below the present tax threshold if they abolish our personal allowance it would mean losing 20% of our already low income at a stroke. How many other groups in society would they even think about doing this to I wonder.


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## _shel (Mar 2, 2014)

Not for all expat pensions, only if you live in certain countries Australia being one were your pension wont be uprated each year.


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## BBCWatcher (Dec 28, 2012)

That's awful, though. I understand why the inflation adjustment would always be in U.K. pound sterling terms and based on U.K. domestic inflation rates. That's fine and sensible. But Australia has inflation, too!

I suppose the counterargument is that if you aren't spending your public pension in the U.K. you aren't paying U.K. VAT and aren't generating economic activity in the U.K. Well, OK -- but what's that got to do with a permanent loss of cost of living adjustments, knocking you permanently to a lower curve, for the time you're living outside the United Kingdom? And you're also not a net burden on the U.K. state if you're living in Australia, as (frankly) many old people are.  You're not visiting the U.K. NHS, in particular.

If despite the lower burden on the U.K. in terms of NHS, etc. there's any merit in "losing" U.K. retirees to other countries, then the proper way to handle that is to have a progressive tax applied to the pension benefits of expatriates. The government shouldn't be doing regressive stuff like COLA freezes and removal of the personal exemption. But this is the same government that took 5p off the top marginal income tax rate, so regressive tax policy is what they love doing.


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