Not looking good for expat pensioners after BREXIT !!

Thrugelmir

lisyloo wrote: »

Don’t pensioners in general have to pay UK income tax on their pension income?

Money spent generates tax revenues as well.

nigelbb

lisyloo wrote: »

Don’t pensioners in general have to pay UK income tax on their pension income?

Not on the state pension or private pensions. The general rule in all Dual Tax Treaties is that Government pensions are taxed in the country where the pension was earned. I guess it's because the tax received is factored into the cost of pension & it wouldn't look good for one government to be effectively paying money direct to another government.
Those classed as Government pensions are those who were directly employed by central or local government so Armed Forces, Civil Service, Teachers, Police, Fire Service etc but not NHS. There are some strange anomalies eg the pension an MP receives is Non-Government but that for an employee of the House of Commons is Government.
Here is HMRC's list https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

Nick_C

Nigelbb - you seem to be confirming Lisyloo's point that British Pensioners living in Spain are paying UK income tax on their state retirement pension and any government pensions that they might receive?

nigelbb

Nick_C wrote: »

I've always felt it rather unfair that pensioners moving to Canada and New Zealand have their pensions frozen.

And anomalous that pensioners retiring to Florida do get annual increases.

But its all down to bilateral agreements.

So the status of UK pensioners in the EU will be consistent with those in other countries. If we enter into bilateral agreements - both sides agreeing - then pensions will continue to increase.

https://www.gov.uk/government/publications/state-pensions-annual-increases-if-you-live-abroad/countries-where-we-pay-an-annual-increase-in-the-state-pension

It's utter bollox about "bilateral agreements". Whether pensions are uprated or not is entirely a decision for the UK government. It's just an excuse to save about £400million/year by not uprating pensions in certain countries.

These "bilateral agreements" only extend to the recognition of years of pension contributions in the other country when assessing pension eligibility. For example the UK requires a minimum of ten years contributions before you receive any pension at all so if you worked 6 years in the UK then 30 years in the USA the UK would recognise those years & pay you 6/10 of the minimum pension you would have earned had you made contributions for ten years. There is no money changing hands & no part payment of pension by the other country. So whether the agreement exists or nt has no bearing on the cost of uprating the pension if the pensioner lives overseas.

There is no reason why the UK couldn't be like France & uprated pensions wherever pensioners may live.

nigelbb

Nick_C wrote: »

Nigelbb - you seem to be confirming Lisyloo's point that British Pensioners living in Spain are paying UK income tax on their state retirement pension and any government pensions that they might receive?

No, the only country that I have personal experience with pensions is France & UK state pensions are taxed in France.

That HMRC document clearly sys that the state pension (or National Insurance Retirement pension as they call it) is Non-Government & thus I believe normally with a Dual Taxation Treaty would be taxed overseas. Each DTT is bilateral & likely different so others may say that all UK pensions are taxed in the UK but it's certainly not true for France.

cloud_dog

ukpoker wrote: »

I think its rather unfair to those who have paid in the full whack of NI contributions in the UK, moved to retire to France or Spain or the like and then not receive an uprated pension thereafter.

The government really is making like as difficult as possible for those people as they can.

With a no deal Brexit I don't see how a government (any government) can reasonably continue the guarantee. It is there currently because there are reciprocal arrangements in place with our European buddies but no organisation would commit to promises without knowing the details across parties.

nigelbb

Thrugelmir wrote: »

Inflation isn't as high in Europe. Why should UK taxpayers subsidise Expats.

That's as nonsensical as saying it's sunnier in Australia why should UK taxpayers subsidise Expats?

It's not a question of subsidy it's a question of fairness. Pensioners who move to Australia or Thailand have always known that their pension will not be uprated on spurious grounds for grubby money saving reasons but that's a decision they made when deciding to retire there. People who retired to Spain or France or Italy could have been living there for 20 years & it would be quite disgraceful to freeze their pensions with little or no warning.

nigelbb

cloud_dog wrote: »

With a no deal Brexit I don't see how a government (any government) can reasonably continue the guarantee. It is there currently because there are reciprocal arrangements in place with our European buddies but no organisation would commit to promises without knowing the details across parties.

I have already explained the idea of reciprocal arrangements is completely bogus. Failure to update pensions is purely a decision of the UK government. In contrast the French government uprates pensions for all their pensioners wherever in the world they may be living. It's outrageous that the UK does not do the same. This isn't just a Brexit issue it's a more general point about the way that the UK treats all pensioners.

Thrugelmir

nigelbb wrote: »

That's as nonsensical as saying it's sunnier in Australia why should UK taxpayers subsidise Expats?

It's not a question of subsidy it's a question of fairness. Pensioners who move to Australia or Thailand have always known that their pension will not be uprated on spurious grounds for grubby money saving reasons but that's a decision they made when deciding to retire there. People who retired to Spain or France or Italy could have been living there for 20 years & it would be quite disgraceful to freeze their pensions with little or no warning.

The Western world as a whole is facing a challenge of an ageing population. With a declining number of people working to support the retired. Money doesn't grow on trees. Though many seem to believe it does.

cloud_dog

nigelbb wrote: »

I have already explained the idea of reciprocal arrangements is completely bogus. Failure to update pensions is purely a decision of the UK government. In contrast the French government uprates pensions for all their pensioners wherever in the world they may be living. It's outrageous that the UK does not do the same. This isn't just a Brexit issue it's a more general point about the way that the UK treats all pensioners.

You're conflating two aspects, one being that the UK Government could operate like France and two that Brexit is not relevant to the point raised.

Fine, the UK Government could operate like France but they do not, they require reciprocal arrangements (rightly or wrongly), as evidenced by the Canada / New Zealand examples.

Due to the Government requirement of reciprocal arrangements Brexit is on point/relevant. Might this state of affairs make the UK Government change it's stance and act like France, possibly.