# Double Taxation – UK State Pension



## Ronnie_Yook

Double Taxation – UK State Pension

Due to the interest in this subject, this is an extension to my earlier thread in the expatforum “Double Taxation”:-

http://www.expatforum.com/expats/po...s-living-portugal/493321-double-taxation.html

Hello, are you an expatforum member who is coming up for retirement, and/or now retired from the United Kingdom (UK). 

If you qualify for, or are in receipt of the United Kingdom State Pension (UKSP), then residing permanently in Portugal might mean you are _'double taxed_'. As I understand it, and with the generous contributions from 'canoeman' and others in the expatforum, the Agreement on Double Taxation c.1968 between Portugal and the UK includes 'government pensions'. These UK government pensions are paid to ie:- civil servants, fire-fighters, HM Forces, NHS staff, police, teachers, etc. These government pensions are '_ring-fenced_' (protected) within this international agreement.

However, as I understand it, the UKSP is “*NOT*” a UK government pension! Although prior to retiring a UK citizen/resident has to apply to the UK government for the UKSP, one can even apply for a UKSP Forecast on the government's own website at:-

https://www.gov.uk/state-pension-statement

The UK government also has a website 'Calculator' for your UKSP:-

https://www.gov.uk/calculate-state-pension

When applying for the UKSP, you will be required to download the Application Form (If Living Abroad):-

https://www.gov.uk/state-pension-if-you-retire-abroad/how-to-claim

And send it along with the requested personal documents ie: Birth Certificate, Marriage Certificate etc. These are sent to The Pension Service, which is a UK government department. When you qualify, and receive your UKSP, it is paid by the UK government. Yet, it is NOT a UK government pension, and is NOT covered by the above international Agreement on Double Taxation, therefore it is *NOT* ring-fenced.

It would seem that, if you were resident in Portugal during 2013, and when you have submitted your annual (January – December) Modelo 3 tax return, the UKSP is treated as income, and it* IS *subject to taxation €€€'s in Portugal!



Additional information, see also the HM Revenue Customs, 'Tax On Your Pension' weblink:-

HM Revenue & Customs: Tax on your State Pension


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## canoeman

Ronnie_Yook said:


> http://www.expatforum.com/expats/po...s-living-portugal/493321-double-taxation.html
> 
> 
> 
> If you qualify for, or are in receipt of the United Kingdom State Pension (UKSP), then residing permanently in Portugal might mean you are _'double taxed_'. As I understand it, and with the generous contributions from 'canoeman' and others in the expatforum, the Agreement on Double Taxation c.1968 between Portugal and the UK includes 'government pensions'. These UK government pensions are paid to ie:- civil servants, fire-fighters, HM Forces, NHS staff, police, teachers, etc. These government pensions are '_ring-fenced_' (protected) within this international agreement.
> 
> However, as I understand it, the UKSP is “*NOT*” a UK government pension! Although prior to retiring a UK citizen/resident has to apply to the UK government for the UKSP,
> 
> 
> 
> Yet, it is NOT a UK government pension, and is NOT covered by the above international Agreement on Double Taxation, therefore it is *NOT* ring-fenced.


Sorry Ronnie but you haven't quite grasped it *both* UK Pensions i.e
A. Pensions paid by UK Gov and some of their agencies to "Crown employees"
B. Standard UK State Pensioners
are covered by the Dual Tax Treaty between Portugal & UK/UK & Portugal

Pension A's are not "ring fenced" and under UK Law *must* be taxed in the UK and you would receive your UK personal Tax allowance against that "Gov Pension" this does not mean you might not still get assessed and taxed in Portugal as any "pensions" are treated as income but with slightly lower tax rates

Any tax paid in UK on Pensions A would be allowed against any total tax bill in Portugal.

For those in receipt of Pension B then if you do not transfer your Tax liability to Portugal then Portugal is perfectly entitled to charge you tax less any allowances on 100% of any "income" and leave it up to you to recover UK Tax paid


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## TonyJ1

Not quite right. Civil service pensions are taxable in the paying country in most double taxation agreements (some exceptions to this rule though - see article 18 of the double taxation agreement with the UK as an example). They are not subject to further taxation in Portugal. However, if you and your spouse receive other income (annuities / interest, etc), the above pension will be taken into account to determine the tax brackets on the other income


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## canoeman

As any UK Pensioner who receives "Civil Service" Pension + an Old Age Pension and even maybe a company pension then both/all Pensions have to be declared in Portugal, the tax deducted on the "Civil Service" Pension must also be declared and would be credited to the overall Portuguese assessment of tax providing that anyone in receipt of a "Civil Service" pension has reached agreement with Portuguese Financas


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## TonyJ1

If it is correctly declared and the tax payer has clear evidence that it is a civil pension, then terms of article 17 - 1 of the Portugal / UK double tax agreement, only the UK is entitled to tax - it is not a question of negotiation with finanças, but being able to back up the return. I have seen too often returns being incorrectly completed with an ugly result at the end. If the expatriate has the correct paperwork and the return has been correctly filled in then he only has the option to challenge the legality of the revenue's action and not accept their interpretation - Revenue loses most of the court cases in Portugal, where it is clear cut and backed up - it will not get to court. If the return has been incorrectly filled in and as long as he obeys the time limits, he can also substitute the incorrect return.


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## canoeman

From my experience with Financas the best way to establish the right to them accepting UK Tax deducted on *"Civil Service Pensions"* is to file certainly for first year or two is "paper" returns at your local office along with supporting evidence, once you have established acceptabce then "electronic returns" are accepted and it's not necessary to challenge.

Again in my experience with Financas once they have "billed" you for tax or fines there is only 1 way to stop process which is to pay by the due date, if you don't then bill just increases automatically whilst you challenge, I've only got into 1 situation with Financas and despite proving with all the correct paperwork and receipts they would not cancel fine which I had to pay not to incur further cost, it then took them 4 months to sort out their *error* and refund fine

What anyone with a "Civil Service Pension" should realize is that yes Financas *must accept UK Tax paid* but that does not mean that they might not be taxed further in Portugal as the gross value of that "Civil Service Pension" is still taken into account for total income and assessment for tax with UK tax paid as a credit


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## TonyJ1

I think there must be some problem. In the dta with the UK, civil service pensions are only taxable in the UK, though under the local tax rules, is that the pension is included with other income to determine the tax rate payable on other income. The pension itself is not subject to further tax in Portugal. If they do tax it, then it must be challenged.

On the issue of fines, you are perfectly correct - pay, squirm, and then wait for refunds.


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## canoeman

You forget or do not mentioned that in the UK the individual gets a Personal Tax Allowance currently for age 65 that is £10,500 per person which is deducted and pension/s taxed on balance,

If a retiree to Portugal had a "Civil Service Pension" and a State Old Age Pension then 
1. They should complete the DT Form to be taxed solely in Portugal on OAP Pension
2. Their "Civil Service Pension" would/might be taxed in UK less Personal Tax Allowance
3. Both Pensions plus UK Tax paid must be declared
3.5 Portugal should not tax a "Civil Service Pension"
BUT
4. The Portuguese tax assessment is based on the* total gross pension/income 1 & 2* which *might* push that person into a higher tax band especially if a "partner" is involved

On the face of it, it sounds unfair but not really as 2. reduces their UK tax bill and 4. levels the playing field

or if a State Old Age Pension and a Occupational Pension then it's 1 and tax assessed on total declared for "family" unit less any allowances


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## TonyJ1

It might be semantics but the civil pensions are not taxed as I have mentioned earlier. I also did highlight that the taxpayer is moved to a higher tax bracket on the remainder / balance of their income. This is why, for new resident pensioners, that they do make use of the benefits in the non habitual resident scheme - they would still be subject to tax in the foreign country for civil pensions and rental income if applicable, etc - but escape additional Portuguese taxes on income for 10 years (they have to read / understand or alternatively obtain advice on how to get into scheme and plan their affairs accordingly if possible). For already resident expatriates - not much to be done except follow the rules, ensure returns are completed correctly and claim withholding taxes from foreign jurisdictions if appropriate.


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## canoeman

TonyJ1 said:


> Not quite right. Civil service pensions are taxable in the paying country in most double taxation agreements (some exceptions to this rule though - see article 18 of the double taxation agreement with the UK as an example). They are not subject to further taxation in Portugal. However, if you and your spouse receive other income (annuities / interest, etc), the above pension will be taken into account to determine the tax brackets on the other income


Afraid semantics are important, as an accountant you know what your talking about but to a "expat" who's it's all new too and might well be under the impression or been told not to do anything then it needs a far clearer explanation so they realize what's involved, apart from the ones that still think they have no need to make IRS returns


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## robc

TonyJ1 said:


> This is why, for new resident pensioners, that they do make use of the benefits in the non habitual resident scheme -


I agree with your points but I think it is important to note that acceptance into the NHR scheme is also dependent on the subjective assessment of the applicant having "High Net Worth" and this is open to interpretation by the Finanças.

Acceptance into NHR is not certain in every instance and people should be aware of this.

Plus for those who applied before the amendments to Decree laws approved in 2010, i.e. those in the scheme before end March 2010 then the 10 year period may, at Finanças discretion be rolled over into another 10 years.

HTH

Rob


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## TonyJ1

robc said:


> I agree with your points but I think it is important to note that acceptance into the NHR scheme is also dependent on the subjective assessment of the applicant having "High Net Worth" and this is open to interpretation by the Finanças.
> 
> Acceptance into NHR is not certain in every instance and people should be aware of this.
> 
> Plus for those who applied before the amendments to Decree laws approved in 2010, i.e. those in the scheme before end March 2010 then the 10 year period may, at Finanças discretion be rolled over into another 10 years.
> 
> HTH
> 
> Rob


It is true that the previous legislation was a mess, but the new legislation is clear. The conditions to be accepted into the scheme is that you have not been a Portuguese tax payer for the previous 5 years - may cause problems if you already have a Portuguese tax number - but there are planning steps around this - can PM if you like. It is another matter on the income - *foreign pensions* (no matter how high or low) will be tax free if you qualify i.e. was not a Portuguese tax payer see above. Some foreign income is exempt - but only if from one of the listed occupations, if persons on list carry out work in Portugal also taxed at a lower rate. Interest etc supposed to be exempt if subject to tax per a double taxation agreement - but finanças has not read legislation properly.

In summary - pensions no problem - other income - some tax free, some not, some should be tax free but legislation not correctly applied. Interest from a country in the Portuguese black list - definitely not tax free


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## robc

Thanks for the offer Tony but already in the NHR scheme, albeit on the original "messy" legislation.

Rob


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## OrangesYeah

I "came of age" last month but have yet to claim my OAP from the UK. I have been really put off by the fact that as I live in Portugal I am supposed to write my life history and send original birth certificate etc. I am tempted to use my UK accountant's address (to where the winter fuel allowance letter was sent) to make life easier. I simply cannot remember all the dates of the many jobs I had in the UK and don't know why I should have to. I have been resident in Portugal since 2008 but I have never worked outside of the UK. Any advice please?


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## canoeman

No different to if you where still in UK same form just goes to a different office.

If you don't fill the form in to the best of your ability then you just delay the process of Pension being paid, normally the claim goes in before your OAP date but all backdated


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## Ronnie_Yook

OrangesYeah said:


> I "came of age" last month but have yet to claim my OAP from the UK. I have been really put off by the fact that as I live in Portugal I am supposed to write my life history and send original birth certificate etc. I am tempted to use my UK accountant's address (to where the winter fuel allowance letter was sent) to make life easier. I simply cannot remember all the dates of the many jobs I had in the UK and don't know why I should have to. I have been resident in Portugal since 2008 but I have never worked outside of the UK. Any advice please?


Hi OrangesYeah

Best advice on this...follow canoeman. He's bang on with info, I know cos we've been through your next hurdle...and canoeman's advice was right.

Yes, it's a pain, all this bureaucracy, but at the end of the day, there is no alternative, once done...sit back and order the Margarita’s! 

Remember to take copies of all your paperwork...send registered 'Correio Registado' ...yes another form to fill in!

You might get a call from The Pensions Service (TPS) in the UK, confirming status of your UKSP application, and requesting permission to return your original documents by 'normal air mail' ...don't panic...we accepted this, and got ours back 100% OK. Please see my earlier postings re GLS/Royal Mail etc. 

Important Note: ...I believe you should do this, as you are applying for the UKSP... sorry it's another form, but download the Double Taxation Form: 'DT -Individual' from the HMRC website:-

http://www.hmrc.gov.uk/cnr/dtindividual.pdf

It should save you a lot of hassle later re any Double Taxation – Portugal/UK.

Unfortunately, we found out about this DT Form 'after' we had done the UKSP application, and we have been double taxed for 2013, and the full amount has to be paid by 31st August 2014...so be warned, it could save you a lot of grief later.

As canoeman has said previously...unless you are fluent in taxation/accountancy laws in Portugal...it's worth consulting a good accountant, particularly for the first year or so.

Do enjoy you retirement!


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## canoeman

Re actual payment of Pension you can opt to have it paid into a bank account anywhere and in any currency.
Payment of Pension to UK is *every 28 days* from date of your birthday

If having payment made to Portugal it's approximately +5 days

Record keeping 2 UK Tax Years equal 1 Portuguese Tax Year so for Portugal 2014 return UK Tax year 2013 Jan - March + UK Tax year 2014 April - Dec (although this is less of an issue now but still applies with Civil Service Pensions)

If your birthday falls middle of month you might need to halve Jan & Dec payment so you declare 12 months Pension not 13

You don't need to declare Winter Fuel Allowance
Exchange rate to declare (unless paid into Portugal then amount credited) date of payment


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## In 2 bikes

I have been reading this with immense interest.

I would like to ask :- 

1 - As a married chap and now with residential (Camara approved) status living solely on my UK, taxed, Government service pension ( no other local / worldwide income for myself or the wife), is it likely that the UK tax allowance of £9800, in my case, will be subject of Portuguese tax?

2 - I retired in April 2014 and am 51. We arrived June 17th 2014. Is it feasible or correct to apply for the NHR scheme?

With a view to getting ahead of the curve on tax affairs, we visited a local accountant today who was recommended by the lawyer we used for the house purchase. I provided copies of proof of income and UK tax paid so far and asked for a 'simulation' of potential taxes that might have to be paid but I have to say I left more confused than ever as her first response was not encouraging.

Thanks guys


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## robc

In 2 bikes said:


> I have been reading this with immense interest.
> 
> 
> 
> 2 - I retired in April 2014 and am 51. We arrived June 17th 2014. Is it feasible or correct to apply for the NHR scheme?
> 
> 
> Thanks guys


I think that you will find that Govt pensions are not included in the NHR Scheme. It always pays to check but they certainly were not when we applied.

HTH

Rob


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## In 2 bikes

robc said:


> I think that you will find that Govt pensions are not included in the NHR Scheme. It always pays to check but they certainly were not when we applied.
> 
> HTH
> 
> Rob


Thanks Rob. That makes sense. I was under the impression NHR ran from 2009 - 19 and was designed, as a tax incentive, to attract people into Portugal by way of not taxing a ' foreign ' income here. I am now learning that, if approved, an applicant to NHR doesn't pay tax here OR in the mother country. Since Gvmnt service pensions *must *be UK taxed, I absolutely hear what you're saying.Cheers !

What about the tax allowance given by HMRC, can that still be taxed in PT?


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## canoeman

Your personal UK Tax allowance is only offset against your Civil Service Pension and your taxed in UK accordingly, from the Portuguese end the Civil Service Pension doesn't come under NHR as far as I know, but you must still declare the Civil Service Pension and UK tax paid, when your State Pension kicks in then the gross value of Civil Service Pension will be added to gross value of you and your wife's State Pension? to calculate your Portuguese Tax band.
When your State Pension kicks in you should prior to receiving complete the HMRC DT form so UK does not tax that Pension as well.

Afraid the problem with a lot *not* all local accountants is they have exactly zero idea of how Dual Tax Treaties work or how a Civil Service Pension is treated


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## robc

In 2 bikes said:


> What about the tax allowance given by HMRC, can that still be taxed in PT?


I am not fully up to date on this situation, Canoeman has a far better grasp than I do, no doubt he will be along with an answer.

Sorry to duck it but I would hate to give you "duff" information.

Rob


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## TonyJ1

*Pensions / nhr scheme*



In 2 bikes said:


> Thanks Rob. That makes sense. I was under the impression NHR ran from 2009 - 19 and was designed, as a tax incentive, to attract people into Portugal by way of not taxing a ' foreign ' income here. I am now learning that, if approved, an applicant to NHR doesn't pay tax here OR in the mother country. Since Gvmnt service pensions *must *be UK taxed, I absolutely hear what you're saying.Cheers !
> 
> What about the tax allowance given by HMRC, can that still be taxed in PT?


Civil pensions are taxable by the paying country and Portugal is certainly not going to refund taxes paid in another country.

The Portuguese and UK tax systems are independent. If the taxpayer is entitled to tax allowances i.e. to reduce the tax payable on UK civil pensions, Portugal will not interfere. If the taxpayer is not registered on the NHR scheme and rréceives other income besides the civil pensions, social security type pensions, then the civil service pension will be included in Portugal to determine the tax rate on the other income, but the civil service pension itself will not be subject to tax in Portugal.

The NHR scheme runs for 10 years including first year of approval i.e. if applied in 2014 - will run until 2023.


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## In 2 bikes

Guys, once again you drill down through the layers to the good stuff..Thanks

CM. I hear what you say about professional ability and had sent a message off to euroFinesco.s.a prior to meeting up with the local accountant but have still yet to receive a reply.

Thanks Rob. I will move away from the idea of NHR as I now understand that this allows an income not to be taxed in either the 'paying' country or country of residence. The U.K. Gvmnt won't permit this on a G pension and will tax accordingly . I had originally thought NHR was just an exemption from PT taxes, only, for 10 years.

Tony. cheers..got your message. I especially feel more confident in that you mention here that Lisbon wont look at the UK tax allowance (the first £9800 untaxed) and tax it at there rates, i.e 4000 Euros free of tax then 14% for the next 7000 Euros worth and so on..


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## OrangesYeah

Maybe I'm missing something and it's a bit early in the morning for me to be posting but I thought that the UK personal tax allowance effectively got lost when you paid tax in Portugal. These days I don't pay tax in the UK because I don't earn above the tax allowance BUT when I file my pt tax return I have to put what I do earn in the UK AND that I have not paid tax on it so I end up paying tax in Portugal instead.


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## canoeman

In 2 bikes said:


> Guys, once again you drill down through the layers to the good stuff..Thanks
> 
> CM. I hear what you say about professional ability and had sent a message off to euroFinesco.s.a prior to meeting up with the local accountant but have still yet to receive a reply.
> .


Not cheap but good, 
Essentially it's all really simple your UK Civil Service Pension is taxed in UK after your Personal Allowance of £9,800 deducted as I advised this should be declared here by paper IRS with proof that Financas will accept that tax must be UK deducted, this sets the precedent for future online returns and when your UK OAP Pensions start.

When they do then all gross totals are used to calculate tax band, currently the 1st 4104€ per person is deducted, tax band assessed then any further allowances deductions made against tax due.

Oranges if you are assessed for UK tax then your entitled to your personal tax allowance, yes you must declare income and any UK tax paid or not and you'll be taxed in Portugal but there are some or certain circumstances where Financas would credit UK tax paid against Portuguese tax owed.

As you put it "UK personal tax allowance effectively got lost" then yes as Portugal is entitled to 100% of your tax (except Civil Service Pensions) which is why DT forms should be completed


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## TonyJ1

In 2 bikes said:


> Guys, once again you drill down through the layers to the good stuff..Thanks
> 
> CM. I hear what you say about professional ability and had sent a message off to euroFinesco.s.a prior to meeting up with the local accountant but have still yet to receive a reply.
> 
> Thanks Rob. I will move away from the idea of NHR as I now understand that this allows an income not to be taxed in either the 'paying' country or country of residence. The U.K. Gvmnt won't permit this on a G pension and will tax accordingly . I had originally thought NHR was just an exemption from PT taxes, only, for 10 years.
> 
> Tony. cheers..got your message. I especially feel more confident in that you mention here that Lisbon wont look at the UK tax allowance (the first £9800 untaxed) and tax it at there rates, i.e 4000 Euros free of tax then 14% for the next 7000 Euros worth and so on..


Not quite right:

Lets say you have a civil pension of €10000 and a normal pension of €5000. Though the €10000 will be tax free in Portugal, the €5000 will be taxed at the rate applicable at the €10000 - €15000 bracket and not the bracket applicable to €0 - €5000. Hope this is clear


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## In 2 bikes

TonyJ1 said:


> Not quite right:
> 
> Lets say you have a civil pension of €10000 and a normal pension of €5000. Though the €10000 will be tax free in Portugal, the €5000 will be taxed at the rate applicable at the €10000 - €15000 bracket and not the bracket applicable to €0 - €5000. Hope this is clear


I understand what you say here but.......

in terms of 1 pension from the U.K. Government, and this being the only source of income, and of which the first £9800 is U.K. tax free, will that £9800 be subject to PT taxation or is it a case of this money has been assessed, as a whole, by the U.K. HMRC and that is the end of it? 

Also, am I correct Tony in hearing what you say that even U.K. Government pensions can be party to the NHR and therefore tax free in both countries for 10 years? This is is something I am lead to believe can not be the case.


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## TonyJ1

In 2 bikes said:


> I understand what you say here but.......
> 
> in terms of 1 pension from the U.K. Government, and this being the only source of income, and of which the first £9800 is U.K. tax free, will that £9800 be subject to PT taxation or is it a case of this money has been assessed, as a whole, by the U.K. HMRC and that is the end of it?
> 
> Also, am I correct Tony in hearing what you say that even U.K. Government pensions can be party to the NHR and therefore tax free in both countries for 10 years? This is is something I am lead to believe can not be the case.


We have to make something clear - if the Pension is say military / police / civil service type - then it is taxable in the UK but still subject to reporting in Portugal but will not be subject to further taxes here. It will be included to calculate taxes on other income if you have any - but still reportable, even if there is no other income.

As to your information on the Non Habitual Scheme not applying to pensions, you have been misinformed. However, to get on to the scheme, there are some conditions and deadlines applicable - and if you do not apply within the deadlines or fulfill the conditions - then you will be taxed under the normal rules.


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## canoeman

No your UK Civil Service Pension is only taxed in UK and the UK tax allowance is deducted and balance taxed in UK.

When you declare in Portugal you declare the GROSS value of PENSION and UK TAX DEDUCTED. 

That is the end of it providing you have proved to Financas that the Civil Service Pension must be taxed only in UK *when* your UK State OAP/s start *or* if you had other earnings THEN the GROSS value of your Civil Service Pension + your other Pensions/earnings are totalled to assess your Taxable band of total income.

Afraid the £9,800 is not forgotten about totally as you seem to think or are questioning, because you have saved UK tax on that amount in UK the playing field is levelled by the GROSS value being used in Portugal's calculation, if it's any comfort it works the opposite way around as well


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## In 2 bikes

TonyJ1 said:


> We have to make something clear - if the Pension is say military / police / civil service type - then it is taxable in the UK but still subject to reporting in Portugal but will not be subject to further taxes here. It will be included to calculate taxes on other income if you have any - but still reportable, even if there is no other income.
> 
> As to your information on the Non Habitual Scheme not applying to pensions, you have been misinformed. However, to get on to the scheme, there are some conditions and deadlines applicable - and if you do not apply within the deadlines or fulfill the conditions - then you will be taxed under the normal rules.


Thanks once again guys... Yep, I'm a retired police officer and Her Majesty's Government would still like to keep that small piece of me.......just as a keep sake !


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## OrangesYeah

canoeman I still don't understand. You said " yes as Portugal is entitled to 100% of your tax (except Civil Service Pensions) which is why DT forms should be completed" I don't get a civil service pension, should I still do a DT form? If I remember correctly I called HMRC about the DT form when we first moved here but was told that as I didn't have any savings accounts in the UK then I needed bother as all the DT form would do was let me have UK interest gross of tax. It seems from what everyone is saying there is more to it than that.


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## canoeman

The HMRC DT form shifts all of your tax liability to Portugal, as a Resident in Portugal then your Primary responsibility to report and pay tax is too Portugal, the DT form tidies everything up even if you still with your new State Pension don't pay UK Tax but if you did then again DT form stops this, if you did or do receive UK interest Nett then that should be reported here, Financas will tax you on it and you would have to recover UK tax paid on that interest another reason for completing form


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## OrangesYeah

Thanks Canoeman, that's a lot clearer now, but if I did the DT form would I still have to file a return in the UK? I'm thinking that as we own a couple of flats there then we probably would, as it's income earned in the UK.


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## robc

OrangesYeah said:


> Thanks Canoeman, that's a lot clearer now, but if I did the DT form would I still have to file a return in the UK? I'm thinking that as we own a couple of flats there then we probably would, as it's income earned in the UK.


Hi, Yes you would, the rental income will need to be declared and will be taxed accordingly.

This is what we do and we have completed the DT]s some 2 years ago.

HTH

Rob


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## canoeman

As robc says have you looked at HMRC Non Resident landlord scheme?


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## OrangesYeah

Thanks Robc. As I still have to file in the UK I can't really see the point of doing the DT form as I don't expect my UK pension to amount to much.
Canoeman, you've confused me again! We are accepted into the NRLS so our agent doesn't have to take the tax from us. Are you suggesting that under the DT we wouldn't therefore have to file in the UK?


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## canoeman

No I just asked the question, I would suggest you do need to complete DT Forms as UK will otherwise HMRC will add your Pension to your current UK earnings and tax accordingly, Portugal without DT forms will also tax you leaving you like Ronnie having to recover tax paid twice.

Really think you need to take advice from an accountant that fully understands Portugal & UK tax and Dual Tax Treaty.

We have similar set up to you but more substantial pensions by the sound of it and have zero problems with UK or Financas maybe because we have completed DT Forms


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## OrangesYeah

Thanks for clariying, Canoeman. I'll think I'll wait to see what pension I actually get before I decide whether to do DT form.


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## OrangesYeah

Oh, I just thought of something else - if, under DT agreement all my tax liability shifted to Portugal what about the S1 form which, I believe, shifts any health expenses I have back to the UK. Somehow doesn't seem fair?


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## canoeman

Just ask for a forecast https://www.gov.uk/state-pension-statement, with respect it's not whether *you* decide, it's whether your circumstances in Portugal reguire you to complete, you have to consider that as a Portuguese Resident then Portugal is your primary responsibility for declaration and payment of tax and therefore you must follow certain actions.

One of those is how you most effectively handle any UK taxation whether it's on a Pension, rental income, interest etc, re OAP Pension whether it's taxed in UK depends on your total UK income and whether your classed as a UK Resident or Not a UK Resident for tax purposes, the DT form takes OAP Pension, interest and royalties out of UK equation and whether it is then taxed in Portugal depends on your overall income but the the tax free allowance on a Pension is 4104€ per person

Say you received a OAP of £5876 or 7345€ deduct 4104€ and balance would be added to your overall income for tax band assessment


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## canoeman

OrangesYeah said:


> Oh, I just thought of something else - if, under DT agreement all my tax liability shifted to Portugal what about the S1 form which, I believe, shifts any health expenses I have back to the UK. Somehow doesn't seem fair?


Under EU regulations the country that pays your OAP Pension is responsible for *certain* things, not all health expenses shift to UK, the UK pays a flat fee per OAP to Social Services in Portugal (not been able to find out this amount) the UK must also supply your EHIC card for emergency healthcare in *any* EU country including UK but *excluding* Portugal


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## OrangesYeah

Thanks for all that info Canoeman, and it's great to know the tax free allowance on a Pension is 4104€ per person, I don't think I'll reach that. Not sure if I can get a pension statement as I'm already of age but I'll try.
Do you happen to know if, when the UK pays its bit towards my healthcare, I will get the same discount when I get my medicines as I do now under the pt health system?


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## canoeman

The payment UK makes to Portugal has zero effect on any Portuguese Health charges, as a Resident you are entitled to exactly the same treatment and pay the same costs as a Portuguese National, equally you would be entitled to free treatment that covers some circumstances and illnesses.


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## OrangesYeah

That's great thanks Canoeman


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