UK Personal tax allowance.

TBC15

xylophone wrote: »

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

Thanks
I had an estimate some time ago and my foundation amount under the old system was more than the new pension, I think I’ve got that one covered any further contributions would show no return.

TBC15

jamesd wrote: »

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."

The current situation in Oman is that I pay no local income tax. So it looks like I should go the personal allowance/citizenship R43 route, I think.

TBC15

While I have sympathetic ears could I mention another scenario that I have been pondering?

Some of my colleges have comprehensively shot themselves in the foot by returning to the UK on retirement mid tax year without qualifying for split tax year status.

Would it have been possible for them to say yes here is the tax I owe and as I’m now a UK tax payer I’d like to put up to £40000 into a SIPP and get the relief?

jamesd

Nick_C wrote: »

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

Your assertion that "UK tax allowances are based on residency, not citizenship" was wrong in the context given in the question, that of a UK citizen, where it never depends on residency.

The treaty digest gives a range of other cases including those who aren't EEA country nationals and who aren't residing in the UK, but did, if they or a person residing wth them are outside the UK for health reasons.

jamesd

TBC15 wrote: »

Some of my colleges have comprehensively shot themselves in the foot by returning to the UK on retirement mid tax year without qualifying for split tax year status.

Would it have been possible for them to say yes here is the tax I owe and as I’m now a UK tax payer I’d like to put up to £40000 into a SIPP and get the relief?

Not sure whether the limit is UK or global pay. If global and they were already in a pension scheme they could have paid in well over £100k with annual allowance carry-forward.

TBC15

So in principal (disregarding the limit) give the tax in with one hand get it back with relief on pension contribution?

jamesd

Yes, in principle. Certainly up to any UK pay they make in the year of return.

TBC15

Does all this have to happen in the tax year of return pay the tax and contribute to the SIPP?

jamesd

Yes. Limits are the annual allowance and pay or other eligible earnings in the tax year in which the pension contribution is made.

EIS purchases can have their relief applied to the tax year before the tax year in which the purchase was made.

TBC15

I can’t thank you enough.

My cunning plans have developed some kind of structure. I take it if I do take my pension at 60 future contributions to a SIPP would be limited to £4000 pa?