# Ex pats to lose Tax Allowance



## Rabbitcat (Aug 31, 2014)

Just wondering has anyone heard any updates on the govt proposal that ex pats lose their tax allowance. It's especially relevant to those with Crown pensions which must be taxed in UK and would result in a drop in income of 20%


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## Horlics (Sep 27, 2011)

Where is the proposal documented? It would be interesting to read it.


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## Rabbitcat (Aug 31, 2014)

Horlics this is an article about it.

The reason I raise it is I rang HMRC today about general advice re moving abroad and the advisor also told me to be aware of this matter as my pension is a Crown one

Expats face tax hike as Treasury plots to cut personal allowance | This is Money


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## xabiaxica (Jun 23, 2009)

isn't this the thing about govt pensions being taxable in Spain ( or wherever you live) from this tax year, as opposed to being taxed at source in the UK?


why would this make such a difference? 

are tax rates in Spain so much higher?

and even if they are, surely if you are declaring the income as you should be, on your tax return in Spain, Spain would be already taking the difference anyway


edit - hmm - maybe I'm thinking of something else, going by the link in the above post


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## Lynn R (Feb 21, 2014)

Here is the actual consultation document.


https://www.gov.uk/government/consu...ents-entitlement-to-the-uk-personal-allowance

As you will see in Section 6.6 it specifically says that the Government does not intend this proposal to impact unfavourably on pensioners, especially Crown pensioners whose pensions will remain taxable only in the UK.

The media do like to get people wound up unnecessarily.

I haven't seen any updates since the consultation document was published last summer. Maybe there will be a mention in tomorrow's Budget.


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## Rabbitcat (Aug 31, 2014)

Lynn you're a star

Frankly I am both relieved and angry as it was HMRC themselves today who told me this info and they knew mine was a Crown pension. Thanks again Lynn


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## Lynn R (Feb 21, 2014)

Rabbitcat said:


> Lynn you're a star
> 
> Frankly I am both relieved and angry as it was HMRC themselves today who told me this info and they knew mine was a Crown pension. Thanks again Lynn


I often have to smile (through gritted teeth) when I read comments from people moaning about how funcionarios in Spain often give the wrong advice or put the wrong interpretation on things, because I know only too well that they don't have the monopoly on that in Spain.

Whenever any reports of this nature appear in the press I always look for the official document itself and read it. Almost always the "spin" put on it in the press is misleading and alarmist.


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## Isobella (Oct 16, 2014)

At least if an advisor from HMRC gives you wrong information you do have a named person who is accountable.


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## Horlics (Sep 27, 2011)

And then what? In what way does this accountability help you?



Isobella said:


> At least if an advisor from HMRC gives you wrong information you do have a named person who is accountable.


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## Claire la richarde (Jul 6, 2009)

Lynn R said:


> Here is the actual consultation document.
> 
> 
> https://www.gov.uk/government/consu...ents-entitlement-to-the-uk-personal-allowance
> ...


There was an update buried in the Autumn Statement on 3 December 2014

https://www.gov.uk/government/uploa...achment_data/file/382327/44695_Accessible.pdf

"2.58 Restricting entitlement to the personal allowance for non-residents – At Budget 2014 the government launched a consultation on whether or not to restrict the Income Tax personal allowance for non-residents. Whilst the government believes there is a strong rationale for doing this, it recognises it is a complex change for both employers and individuals who may be affected. The government will continue to discuss implementation of this change with stakeholders. Should the government decide to proceed, a more detailed consultation will be undertaken. No change will come into effect before April 2017."


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## Lynn R (Feb 21, 2014)

Claire la richarde said:


> There was an update buried in the Autumn Statement on 3 December 2014


Buried so deep that not even HMRC employees are aware of it, apparently!

Well spotted, Claire.


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## alborino (Dec 13, 2014)

Horlics said:


> And then what? In what way does this accountability help you?


Horlics I think it helps a lot because you can seek redress and HMRC lay down very clear processes available to you to do so. As a UK employer we and to my knowledge our employees have never had issues with getting clear decisions and a great deal of help from HMRC. We especially like that you can ask to speak to people higher up the chain if you have concerns or are dissatisfied. 

In 12 years I haven't experienced anything close to that in Spain but that might just be me


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## baldilocks (Mar 7, 2010)

Claire la richarde said:


> There was an update buried in the Autumn Statement on 3 December 2014
> 
> https://www.gov.uk/government/uploa...achment_data/file/382327/44695_Accessible.pdf
> 
> "2.58 Restricting entitlement to the personal allowance for non-residents – At Budget 2014 the government launched a consultation on whether or not to restrict the Income Tax personal allowance for non-residents. Whilst the government believes there is a strong rationale for doing this, it recognises it is a complex change for both employers and individuals who may be affected. The government will continue to discuss implementation of this change with stakeholders. Should the government decide to proceed, a more detailed consultation will be undertaken. No change will come into effect before April 2017."


They kept it very quiet, since the consultation on it was only for a very short period and it expired, I think, in June.


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## Lynn R (Feb 21, 2014)

baldilocks said:


> They kept it very quiet, since the consultation on it was only for a very short period and it expired, I think, in June.


The consultation paper was issued in August 2014 and the deadline for submission of comments was 9 October 2014.


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## Claire la richarde (Jul 6, 2009)

Lynn R said:


> Buried so deep that not even HMRC employees are aware of it, apparently!
> 
> Well spotted, Claire.


To be charitable (and I do try) it's possible that the HMRC employee's advice was to bear the possibility in mind for the future, based on the following bits which I've put in bold
"Whilst *the government believes there is a strong rationale for doing this*, it recognises it is a complex change for both employers and individuals who may be affected. T*he government will continue to discuss implementation of this chang*e with stakeholders. *Should the government decide to proceed*, a more detailed consultation will be undertaken. No change will come into effect before April 2017."

So no change before April 2017, but the government is still thinking about it, and there might be changes thereafter. April 2017 is only two years away.


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## thrax (Nov 13, 2008)

Government pensions are always taxed in the country of origin and not in the country of residence. However, there has been a small change here in Spain in that you are now required to declare Government pensions. So, even thought they won't be taxed here they will be used to work out your personal allowances etc. So any other income earned here, or state pensions (which are taxable in your tax resident country) or other incomes from abroad will probably result in you paying more tax as your Government pension will be included in your personal allowance.


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## xabiaxica (Jun 23, 2009)

thrax said:


> Government pensions are always taxed in the country of origin and not in the country of residence. However, there has been a small change here in Spain in that you are now required to declare Government pensions. So, even thought they won't be taxed here they will be used to work out your personal allowances etc. So any other income earned here, or state pensions (which are taxable in your tax resident country) or other incomes from abroad will probably result in you paying more tax as your Government pension will be included in your personal allowance.


I recieve a (very) small 'widows pension' from the UK

I've always declared it here - maybe I shouldn't have


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## 90199 (Mar 21, 2010)

thrax said:


> Government pensions are always taxed in the country of origin


With certain exceptions.


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