UK Personal tax allowance.

TBC15

Are all UK citizens entitled to an individual UK tax allowance

(Disregarding tapering on incomes above £100,000)?

xylophone

http://www.litrg.org.uk/tax-guides/tax-basics/what-tax-allowances-am-i-entitled

https://www.gov.uk/tax-uk-income-live-abroad/personal-allowance

Nick_C

UK tax allowances are based on residency, not citizenship.

TBC15

So UK born and bred, working abroad tax free, no personal tax allowance on UK work related pension?

TBC15

xylophone wrote: »

http://www.litrg.org.uk/tax-guides/tax-basics/what-tax-allowances-am-i-entitled

https://www.gov.uk/tax-uk-income-live-abroad/personal-allowance

From your second reference citizenship is a key requirement.

xylophone

UK tax allowances are based on residency, not citizenship.

https://www.gov.uk/tax-uk-income-live-abroad/personal-allowance

You’ll get a Personal Allowance of tax-free UK income each year if either:

you’re a citizen of a European Economic Area (EEA) country - including British passport-holders

you’ve worked for the UK government at any time during that tax year.

You might also get it if it’s included in the double-taxation agreement between the UK and the country you live in.

Claim the Personal Allowance
If you’re not a UK resident, you have to claim the Personal Allowance at the end of each tax year in which you have UK income. Send form R43 to HM Revenue and Customs (HMRC).

jamesd

Nick_C was wrong. As a citizen of the UK you get a personal allowance wherever you happen to reside and whatever your domicile is. This will not protect you against taxation in the place where you reside, just in the UK. And if you are in a place where there is no tax, there's no tax there either.

You should also be aware that most of the UK tax treaties provide for pension income to be taxed in the country of tax residence, not the country from which the payment originates. So check the tax treaty applicable to you and you may find that it's all taxed at nil because of your residence. This digest is a good start, though check the full treaty details also available from HMRC for more comprehensive details.

If the work pension is defined contribution this would also mean that you can take the whole of the taxable 75% at once with no income tax to pay, though if you return to the UK within the following few years you will have to pay tax on it in the year you return. Well, assuming your residence has the typical tax treaty, it might not, so be sure before you do it!

TBC15

Thanks xylophone/jamesd

I’m currently working in Oman in just over 2ys I would be able to start taking a pension in the UK aged 60 I was wondering how it would be taxed if I was still working.

Bit of reading required I think.

xylophone

Have you looked into your position with regard to a UK state pension?

https://www.gov.uk/government/publications/application-for-a-state-pension-statement

https://www.gov.uk/new-state-pension/eligibility

jamesd

This from the UK-Oman tax treaty but do contact HMRC to verify because the digest has for pensions the note ST meaning where subject to taxation and that creates a big difference between no tax and tax at 0%:

"ARTICLE 18
Pensions
(1) Subject to the provisions of paragraph (2) of Article 19 of this Agreement:
(a) pensions and other similar remuneration paid in consideration of past employment,
and
(b) any annuity paid,
to an individual who is a resident of a Contracting State, and is subject to tax in respect
thereof in that State, shall be taxable only in that State.
(2) The term "annuity" means a stated sum payable to an individual periodically at stated
times during his life or during a specified or ascertainable period of time under an
obligation to make the payments in return for adequate and full consideration in money or
money's worth."

Nick_C

jamesd wrote: »

Nick_C was wrong ...

Depends on the context. If you are talking about people residing in the UK, nationality is irrelevant.

If you are talking about people living overseas, then the situation is different. OP wasn't specific as to what their question was about.

And if you are talking about people living overseas with a UK income, the tax allowance isn't only for UK citizens. It also applies to EU citizens and UK Government employees.