# Article in Telegraph poses big dilema for me...anyone else seen it?



## KIP1958 (Aug 2, 2014)

Proposal for no Tax allowance for Government Pensions and rental Income for uk expats... eeeek


Expats face £400 million tax raid - Telegraph


----------



## NickH01 (May 4, 2014)

I am about to retire from the Civil Service and have just had an offer accepted on a house in Spain......now this. How are we to plan our retirement when we don't know what will happen next??


----------



## silverfox1 (Apr 24, 2013)

I think that while the UK remains in the EU, Britons in Spain will get their UK Personal Tax Allowances


----------



## KIP1958 (Aug 2, 2014)

NickH01 said:


> I am about to retire from the Civil Service and have just had an offer accepted on a house in Spain......now this. How are we to plan our retirement when we don't know what will happen next??


I'm in a similar position.

I have been looking at possibilities and number crunching, now this could possibly throw a spanner into the works if it looks like my ex forces pension and rental income isn't going to be as much as I thought it was going to be.


----------



## KIP1958 (Aug 2, 2014)

silverfox1 said:


> I think that while the UK remains in the EU, Britons in Spain will get their UK Personal Tax Allowances


I hope you are right.

The article doesn't make anything exactly clear


----------



## extranjero (Nov 16, 2012)

silverfox1 said:


> I think that while the UK remains in the EU, Britons in Spain will get their UK Personal Tax Allowances


Why do you think that?


----------



## silverfox1 (Apr 24, 2013)

KIP1958 said:


> I hope you are right.
> 
> The article doesn't make anything exactly clear



Hopefully, they will see sense and not implement this legislation (they will lose a lot of votes otherwise) Could the UK cope with thousands of returning OAPs claiming benefits and using the National Health?


----------



## VFR (Dec 23, 2009)

silverfox1 said:


> Hopefully, they will see sense and not implement this legislation (they will lose a lot of votes otherwise) Could the UK cope with thousands of returning OAPs claiming benefits and using the National Health?


They would not be able to claim (much if any) as they still have their pensions.
NHS ?, no sweat as they would not get an appointment anyway going via the news.


----------



## jimenato (Nov 21, 2009)

silverfox1 said:


> I think that while the UK remains in the EU, Britons in Spain will get their UK Personal Tax Allowances


I don't see that from the article.

Benefits are residence based in the UK - I don't see why tax allowances shouldn't be as well.


----------



## ptrclvd (May 26, 2012)

There is an excellent article on the Citizens Advice website re the possible proposals. It gives a proper view of this rather than the sensationalism so often seen in the press. 
It can be found at

Another Day, Another Headline Predicting a Tax Raid on Expats. - Citizens Advice Bureau Spain


----------



## Calas felices (Nov 29, 2007)

It's interesting that despite being in being for only nine months, this website is purporting to have some sort of quasi legal status through using a title which in the Uk carries some sort of status. It seems to be nothing less than the opinion of a few much like the newspaper article. The truth appears to be somewhere in between.


----------



## Lynn R (Feb 21, 2014)

KIP1958 said:


> Proposal for no Tax allowance for Government Pensions and rental Income for uk expats... eeeek
> 
> 
> Expats face £400 million tax raid - Telegraph


Please read Section 6.6 of the actual Government consultation document - where it states quite specifically that the Government is NOT intending to withdraw the UK personal allowances for people who are in receipt of Government Pensions:-



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

This is the relevant part:-

"The government is concerned that individuals, like those in receipt of government service pensions, who are not eligible for double taxation relief, would be disproportionately affected by the removal of the UK Personal Allowance.

The government does not intend to raise taxes on vulnerable groups or in situations where the UK is the principal taxing authority and an individual has no recourse to relief as a result of the UK having sole taxing rights under a tax treaty. If the government were to restrict non-residents’ entitlement to the Personal Allowance, it would intend this to apply to types of income which are taxable both in the UK and overseas (such as that from immovable property) but to retain the Personal Allowance on income that is taxable exclusively in the UK."

Just another example of the press misrepresenting the facts and acting in an alarmist way. If they're not doing this deliberately then it means they are plain stupid and cannot understand what is quite plainly written.


----------



## mrypg9 (Apr 26, 2008)

Lynn R said:


> Please read Section 6.6 of the actual Government consultation document - where it states quite specifically that the Government is NOT intending to withdraw the UK personal allowances for people who are in receipt of Government Pensions:-
> 
> 
> 
> ...


The voice of sanity...
I'm beginning to think some immigrants are closet masochists.

Relying on rental income as an integral part of your income doesn't seem a wise strategy.
Many people who plan to do this have no experience of being landlords and have little idea of the costs and uncertainties involved in renting.


----------



## Lynn R (Feb 21, 2014)

ptrclvd said:


> There is an excellent article on the Citizens Advice website re the possible proposals. It gives a proper view of this rather than the sensationalism so often seen in the press.
> It can be found at
> 
> Another Day, Another Headline Predicting a Tax Raid on Expats. - Citizens Advice Bureau Spain


Yes, it is a good article. I see that in a previous article the author also scotched the false reporting in the expat press regarding the over 65s' exemption from capital gains tax on the sale of their habitual residence.

I'd say this website would be a good source of reliable information for those wondering where they can obtain the facts rather than the rumours - in addition to this forum, of course!


----------



## patrickelvin (Aug 13, 2014)

*loss of tax allowance from UK*

There are various articles on the web about proposals to take away the personal allowances from expats nonresident from uk for tax purposes . I outline my position below and would be interested in any comments 

I am new to this forum so forgive the ignorance . I am a simple ex military man on a taxed at source gvt pension ( no choice) living permanently in SPain and am a declared non resident for tax purposes . I have no property in UK . I make a tax declaration in Spain and when I declare my miltary pension i am told by the Spanish Gestor that government pensions dont have to be declared. Will these proposals affect me . I dont get any benefits from the tax I pay in UK on my pension , which is around 3000 pounds a year , it would seem a little unfair to then give no tax allowance at all when I am no burden whatsoever on the uk system .

I imagine there must be others in the same boat here in Spain


I quote an article below from website poundsterling 

The warning following reports that Chancellor George Osborne is preparing to prevent non-residents from offsetting income generated in the UK against their £10,000 personal allowance.

Under current rules, expats are able to offset income earned in Britain, such as income earned from renting out their properties, against the personal allowance.

The measure, which has now been put out for consultation, was first mooted in the Budget in March and could affect up to an estimated 400,000 expatriates.

Mr Green comments: “Historically, expats have maintained some UK investments due to the tax advantages they have received. However should this new rule come into effect, it can be reasonably expected that more and more expats would consider severing financial ties with the UK as there would be fewer than ever incentives for them to keep a financial base in Britain.

“If this latest benefit is scrapped, there would be, typically, no real tax advantage for expats to invest in UK property or UK pension schemes.

“If expats restructure their finances offshore, as I strongly suspect many will to take advantage of the important associated benefits, they will probably look to cut all what the Treasury is calling ‘strong economic connections’ to the UK - and this, for many, will include transferring their pensions out of Britain.

“As such, and because expat pensioners are those who would suffer the biggest hit from the proposed changes, there is likely to be a significant uptick in the already strong demand for HMRC-recognised Qualifying Recognised Overseas Pension Schemes, or QROPS.”

Amongst other major benefits, QROPS give the expat greater tax efficiency, investment flexibility and a choice of currency in which the pension is paid out.

Established by HMRC in April 2006, there has been a steady year-on-year increase in demand for QROPS. Currently around 10,000 expats, or those who are imminently planning to reside overseas, move their pensions each year.


----------



## extranjero (Nov 16, 2012)

You seem to have been given incorrect advice.
Firstly, if you are living in Spain permanently, then you are a resident and also tax resident, no choice in the matter.
Next year you will have to declare your military pension in Spain, though it will continue. To be taxed in UK. Apparently it will be used to determine your tax base.
There is another thread on this forum concerning the possible withdrawal of the UK tax allowance.


----------



## patrickelvin (Aug 13, 2014)

There are various articles on the web about proposals to take away the personal allowances from expats nonresident from uk for tax purposes . I outline my position below and would be interested in any comments 

I am new to this forum so forgive the ignorance . I am a simple ex military man on a taxed at source gvt pension ( no choice) living permanently in SPain and am a declared non resident for tax purposes . I have no property in UK . I make a tax declaration in Spain and when I declare my miltary pension i am told by the Spanish Gestor that government pensions dont have to be declared. Will these proposals affect me . I dont get any benefits from the tax I pay in UK on my pension , which is around 3000 pounds a year , it would seem a little unfair to then give no tax allowance at all when I am no burden whatsoever on the uk system .

I imagine there must be others in the same boat here in Spain


I quote an article below from website poundsterling 

The warning following reports that Chancellor George Osborne is preparing to prevent non-residents from offsetting income generated in the UK against their £10,000 personal allowance.

Under current rules, expats are able to offset income earned in Britain, such as income earned from renting out their properties, against the personal allowance.

The measure, which has now been put out for consultation, was first mooted in the Budget in March and could affect up to an estimated 400,000 expatriates.

Mr Green comments: “Historically, expats have maintained some UK investments due to the tax advantages they have received. However should this new rule come into effect, it can be reasonably expected that more and more expats would consider severing financial ties with the UK as there would be fewer than ever incentives for them to keep a financial base in Britain.

“If this latest benefit is scrapped, there would be, typically, no real tax advantage for expats to invest in UK property or UK pension schemes.

“If expats restructure their finances offshore, as I strongly suspect many will to take advantage of the important associated benefits, they will probably look to cut all what the Treasury is calling ‘strong economic connections’ to the UK - and this, for many, will include transferring their pensions out of Britain.

“As such, and because expat pensioners are those who would suffer the biggest hit from the proposed changes, there is likely to be a significant uptick in the already strong demand for HMRC-recognised Qualifying Recognised Overseas Pension Schemes, or QROPS.”

Amongst other major benefits, QROPS give the expat greater tax efficiency, investment flexibility and a choice of currency in which the pension is paid out.

Established by HMRC in April 2006, there has been a steady year-on-year increase in demand for QROPS. Currently around 10,000 expats, or those who are imminently planning to reside overseas, move their pensions each year.


----------



## ddrysdale99 (Apr 3, 2014)

silverfox1 said:


> Hopefully, they will see sense and not implement this legislation (they will lose a lot of votes otherwise) Could the UK cope with thousands of returning OAPs claiming benefits and using the National Health?


But expats don't get a vote in the uk...


----------



## xabiaxica (Jun 23, 2009)

ddrysdale99 said:


> But expats don't get a vote in the uk...


yes they do for 15 years after leaving


----------



## mrypg9 (Apr 26, 2008)

xabiachica said:


> yes they do for 15 years after leaving


Yup. But as their votes would be thinly distributed over many constituencies they would have no impact.
Besides, such tax changes would not be an election issue.
A vote isn't a magic wand.
The alarmist reporting has blown this out of all proportion.
Do people really decide to leave the UK and become immigrants in Spain with such a slender income margin of affordability?
Do people not realise that tax and exchange rates are not engraved in stone .


----------



## 90199 (Mar 21, 2010)

There is a way if you have a U.K. govt. pension, although the tax office say that tax can only be paid in the U.K., there are exemptions.

Also retired Ex Pats do invest a fair sum in the U.K., if the tax concessions/allowances are to be removed, then this will discourage investments, from what many of the see as a safe haven and no doubt may will invest elsewhere, I have already done so.


----------



## mrypg9 (Apr 26, 2008)

Hepa said:


> There is a way if you have a U.K. govt. pension, although the tax office say that tax can only be paid in the U.K., there are exemptions.
> 
> Also retired Ex Pats do invest a fair sum in the U.K., if the tax concessions/allowances are to be removed, then this will discourage investments, from what many of the see as a safe haven and no doubt may will invest elsewhere, I have already done so.


Do you think immigrants invest significantly in UK funds apart of course from pension plans? 
We often hear that many immigrants are struggling to make ends meet.
It seems that if you take the trouble to read the small print of the proposals...note 'proposals'...there is little if anything to get alarmed about.
At least this time the ****tive ogre is HM Government and not those dastardly Spaniards.


----------



## Alcalaina (Aug 6, 2010)

mrypg9 said:


> Do you think immigrants invest significantly in UK funds apart of course from pension plans?
> We often hear that many immigrants are struggling to make ends meet.
> It seems that if you take the trouble to read the small print of the proposals...note 'proposals'...there is little if anything to get alarmed about.
> At least this time the ****tive ogre is HM Government and not those dastardly Spaniards.


A lot of Brits living in Spain do rely on income from renting out their house in the UK. It's what we often advise them to do in fact - "don't burn your bridges" etc. 

Could somebody clarify what the proposed change would mean - e.g. if somebody got £10k a year rental income, how much tax would they pay on it now and how much would they pay if they lost the allowance?


----------



## 90199 (Mar 21, 2010)

mrypg9 said:


> Do you think immigrants invest significantly in UK funds apart of course from pension plans?
> We often hear that many immigrants are struggling to make ends meet.
> It seems that if you take the trouble to read the small print of the proposals...note 'proposals'...there is little if anything to get alarmed about.
> At least this time the ****tive ogre is HM Government and not those dastardly Spaniards.


I know ex pats invest in the U.K. and elsewhere. The financial advisor I use has so much work and so many clients, he is seriously considering refusing further business. You won't here from the rich ex pats all their financial queries have probably been answered profesionally.


----------



## extranjero (Nov 16, 2012)

Alcalaina said:


> A lot of Brits living in Spain do rely on income from renting out their house in the UK. It's what we often advise them to do in fact - "don't burn your bridges" etc.
> 
> Could somebody clarify what the proposed change would mean - e.g. if somebody got £10k a year rental income, how much tax would they pay on it now and how much would they pay if they lost the allowance?


If there was no allowance, and the whole £10,000 was taxed at 20%, surely it would be £2,000? 
Patrickelvin- did I read your post wrong?
Are you saying you live in Spain permanently, but have non resident status for tax here?


----------



## mrypg9 (Apr 26, 2008)

Alcalaina said:


> A lot of Brits living in Spain do rely on income from renting out their house in the UK. It's what we often advise them to do in fact - "don't burn your bridges" etc.
> 
> Could somebody clarify what the proposed change would mean - e.g. if somebody got £10k a year rental income, how much tax would they pay on it now and how much would they pay if they lost the allowance?


I personally would never advise someone to view rental income from anywhere as anything other than pocket money. It's too unreliable anincome source to form a main plank of anyone's main income.
I know, I've been a landlord


----------



## mrypg9 (Apr 26, 2008)

Hepa said:


> I know ex pats invest in the U.K. and elsewhere. The financial advisor I use has so much work and so many clients, he is seriously considering refusing further business. You won't here from the rich ex pats all their financial queries have probably been answered profesionally.


Rich expats/immigrants go to Tuscany, the South of France, the Caribbean, Monaco...they have homes all over the world.
Spain is for the moderately 'comfortable'.


----------



## ddrysdale99 (Apr 3, 2014)

xabiachica said:


> yes they do for 15 years after leaving


You learn something new every day.
I do find that rather strange though - getting to vote where you used to live years ago.


----------



## jimenato (Nov 21, 2009)

extranjero said:


> If there was no allowance, and the whole £10,000 was taxed at 20%, surely it would be £2,000?
> Patrickelvin- did I read your post wrong?
> Are you saying you live in Spain permanently, but have non resident status for tax here?


I thought when I read your first comment that you might have misread. He says he decalres in Spain therefore his non-resident for tax puposes comment must have been referring to the UK.

I think.


----------



## 90199 (Mar 21, 2010)

mrypg9 said:


> Rich expats/immigrants go to Tuscany, the South of France, the Caribbean, Monaco...they have homes all over the world.
> Spain is for the moderately 'comfortable'.


Geographically we are not part of Spain, here in the Canary islands there are some very wealthy Ex Pats, from many different countries, it's the climate that attracts them. 

The down side is that they push up the price of properties, but having said all that this island is an exception, most of our expats are refugees from the South American dictatorships, they don't seem to have much, a lot left in a hurry.


----------



## patrickelvin (Aug 13, 2014)

jimenato said:


> I thought when I read your first comment that you might have misread. He says he decalres in Spain therefore his non-resident for tax puposes comment must have been referring to the UK.
> 
> I think.


This is patrick elvin I am non resident from uk resident in spain for tax purposes but I have since found the gvt consulting document which will exempt gvt pensions from the loss of personal allowance because uk gvt retsins right to tax at source therefore you will retain the tax allowance


----------



## mrypg9 (Apr 26, 2008)

Hepa said:


> Geographically we are not part of Spain, here in the Canary islands there are some very wealthy Ex Pats, from many different countries, it's the climate that attracts them.
> 
> The down side is that they push up the price of properties, but having said all that this island is an exception, most of our expats are refugees from the South American dictatorships, they don't seem to have much, a lot left in a hurry.


If I had loadsamoney I think I'd go to the Arctic Circle.
42c here today.


----------



## 90199 (Mar 21, 2010)

mrypg9 said:


> If I had loadsamoney I think I'd go to the Arctic Circle.
> 42c here today.



Only 22ºc here


----------



## xabiaxica (Jun 23, 2009)

Hepa said:


> Only 22ºc here


our nighttime lows have been higher than that for weeks....


----------



## 90199 (Mar 21, 2010)

xabiachica said:


> our nighttime lows have been higher than that for weeks....


It's the trade winds, keeps us mostly cool in the summer months, but every now and again we get a hot blast from the Sahara.

Warmer down on the coast though.


----------



## Lynn R (Feb 21, 2014)

mrypg9 said:


> If I had loadsamoney I think I'd go to the Arctic Circle.
> 42c here today.


We've had a visit from the terral today and it's been the hottest day so far this year, by far. 41C when I was going out at 2.15 pm and 38 when I came back at 6.30. Is due to be much cooler tomorrow according to the forecasts, thank goodness - this hot is not nice at all. It was much better down at Torre del Mar though, the wind was stronger and much cooler. Amazing what a difference just 5km can make.


----------



## Williams2 (Sep 15, 2013)

silverfox1 said:


> I think that while the UK remains in the EU, Britons in Spain will get their UK Personal Tax Allowances


And what about Scottish Expats, may I ask - are they 'up the creek' with the
even greater worry about what happens to their tax allowances, Pensions, etc
if Scotland votes for independence next month ?


----------



## Justina (Jan 25, 2013)

*Scottish vote*



Williams2 said:


> And what about Scottish Expats, may I ask - are they 'up the creek' with the
> even greater worry about what happens to their tax allowances, Pensions, etc
> if Scotland votes for independence


I think that you can be rest assured that absolutely nothing will happen to our Scottish pension system which goes via Newcastle. 
With a yes vote, perhaps in the future, ie in ten or more years. But it will be all worked out.
England is not going to wipe us out of a system to which we have contributed.
Think of it rationally, Scots are everywhere, some of us have paid into the system while outside of the country and we do receive our dosh, and if one day we don't then we can trot around our local plaza. 
Imagine harrassing Cameron in Portugal this week?


----------



## patrickelvin (Aug 13, 2014)

dont worry 

gvt pensions are exempt because UK retains tax control of them and they are specifically exempted in the consultative document


----------



## extranjero (Nov 16, 2012)

patrickelvin said:


> dont worry
> 
> gvt pensions are exempt because UK retains tax control of them and they are specifically exempted in the consultative document


So what would happen if someone kept the UK allowance because they had a Govnt pension, but also had rental income, and the two together were below the tax threshold?


----------



## Justina (Jan 25, 2013)

*Patrick*



patrickelvin said:


> dont worry
> 
> gvt pensions are exempt because UK retains tax control of them and they are specifically exempted in the consultative document


Mine is a simple pension, if it disappears I will quite happily toddle along the street denouncing the British government.


----------



## patrickelvin (Aug 13, 2014)

the gvt pension will attract tax relief t the unearned rental income will not atrarct any relief if the proposals go ahead , you can claim allowable expenses against the income such as agents fees etc


----------



## Goldeneye (Nov 12, 2011)

mrypg9 said:


> I personally would never advise someone to view rental income from anywhere as anything other than pocket money. It's too unreliable anincome source to form a main plank of anyone's main income.
> I know, I've been a landlord


I have to disagree.... I too am and have been a landlord.. My rental property IS part of my retirement strategy.. I carefully selected the own my rental would be in...... People do need a roof over their heads.. In the 12 years I've had my duplex there have only been 3 months when the property wasn't rented and 2 of those months were because we chose to update and up the rent!! 

Thanks to the tenants our property will be paid for in 7 years having cost us a grand sum of ZERO..... Absolutely part of my pension plan.. some of us (in the real world) don't have lucrative Gvmt pensions to fall back on!! 
..
..
.


----------



## mrypg9 (Apr 26, 2008)

Goldeneye said:


> I have to disagree.... I too am and have been a landlord.. My rental property IS part of my retirement strategy.. I carefully selected the own my rental would be in...... People do need a roof over their heads.. In the 12 years I've had my duplex there have only been 3 months when the property wasn't rented and 2 of those months were because we chose to update and up the rent!!
> 
> Thanks to the tenants our property will be paid for in 7 years having cost us a grand sum of ZERO..... Absolutely part of my pension plan.. some of us (in the real world) don't have lucrative Gvmt pensions to fall back on!!
> ..
> ...


Now I would with you....if I were a landlord in Cansda, as I once was!. Maybe Canadians are different...no problems whatsoever withtwo lovely tenants, one of whom became a friend. I sold the property to the second tenant and made a healthy post- tax profit.
But the whole situation regarding property is different in Canada. I bought my place literally on a handshake. There is a very high level of trust in commercial relations, at least that was my experience. 
Friends I have in Spain who rent property all relate,horrendous experiences. I had less than desirable tenants in the UK, both came with impeccable references..one was in the US military.
As forgovernment pensions...people receiving them are just as much in the real world as private sector workers. Low interest rates and inflation affect all. Final,salary schemes are being phased out everywhere.
Incidentally, the average government pension is ver low, around £4000 per annum. Most people on average incomes can't afford to save much for retirement. Those who look to their house as their pension pot hope they won't be caught in a downward price spiral.
An annuity of £30k will yield around £120 a month. The basic state pension is £520 a month or thereabouts. An investment of £100000 will return atmost £4000 per annum at current interest rates. 
Money these days is made by money, not work, for most people.


----------



## mrypg9 (Apr 26, 2008)

Justina said:


> I think that you can be rest assured that absolutely nothing will happen to our Scottish pension system which goes via Newcastle.
> With a yes vote, perhaps in the future, ie in ten or more years. But it will be all worked out.
> England is not going to wipe us out of a system to which we have contributed.
> Think of it rationally, Scots are everywhere, some of us have paid into the system while outside of the country and we do receive our dosh, and if one day we don't then we can trot around our local plaza.
> Imagine harrassing Cameron in Portugal this week?


I think you can rest assured that in ten weeks time Scotlandwill be part of the UK.
Now the latest blunder from thebYes campaign, trying to scaremongerover thevNHS.
Salmond truly is a clown.
After the defeat, hewill surely go and his clever Deputy will take over.


----------

