# Income Tax hikes



## daisyman1951 (Jun 7, 2013)

I have just seen (in the news section of this forum) the new tax rates for 2013, I was hoping to live on my company pension of around €880 per month for 3 years until my state pension kicks in, might need to rethink the move now. Is this hike causing much of a stir amongst UK expats?


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## canoeman (Mar 3, 2011)

What tax hikes are you referring too? sorry but I don't see that there is any major change for IRS taxation or allowances for "expat pensioners"


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## daisyman1951 (Jun 7, 2013)

*Tax Hikes*



canoeman said:


> What tax hikes are you referring too? sorry but I don't see that there is any major change for IRS taxation or allowances for "expat pensioners"


Well first of all I'm referring to info in Portugal news on this site but since you mentioned it I am now trying to discover my position with an occupational pension. It seems that the 2009 law was revised in April 2013 to clarify no tax on occupaional pension for non habitual residents. Non habitual seems to mean not lived in Portugal before this scheme came into force according to Deloittes, others do not agree, plus some other conditions.
I need to talk to a Pt tax advisor because some of this needs to be put in place before arrival (apparently).
Can you recommend anyone please?


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## canoeman (Mar 3, 2011)

I've commented before that this "news" isn't a terribly accurate representation of how taxation and the system works

With respect I don't believe that the Non Habitual Scheme is really suitable for a monthly pension of 880€ pm, the benefit would only give you a flat rate tax of 20% for a 10 year period, if your pension was taxed in UK with the dual tax agreement your tax liability if any would be extremely low, all info on the practicalities of NHS would seem that to set up correctly requires a very good major accountancy firm like PWC or similar and the cost involved needs to be considered against possibility of any gain.

You can only compare by seeing your personal forecast for opting to pay UK tax, then declaring Pension + UK tax paid in Portugal less any allowance you might be entitled too and estimated if any Portuguese tax
or opting to have Pension paid tax free in UK and declared and taxed in Poertugal and comparing both with NHS

This link gives allowances for 2013 PwC Tax Guide 2013: IRS: Personal allowances and tax benefits and this one for 2012 PwC Tax Guide 2012: IRS: Personal allowances and tax benefits

Non Habitual Scheme means not only that you might not have lived in Portugal but you hadn't also filed a tax return in Portugal for previous 5 years


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