Overseas pension - do I need to declare it?

Bermyboy

I am about to get a lump sum pension from a country overseas. Do I have to declare it? If so how?

The funds will be to help sustain me for the rest of my life but it is paid as a lump some because I haven't got enough years to get the full monthly payment. I am concerned that the lump sum will take me into a higher tax bracket this year, and deductions will impact on my future finances. 

eastcorkram

Is tax being paid on it, in the country it's coming from?

Brie

I filled out a tax return due to getting a foreign pension - but mine is paid monthly.  Frankly HMRC had no interest in it whatsoever and I don't think it has impacted on my tax rate (granted mine is very low).  They may simply assume that tax is paid at source "over there" and hence not take it into account.  

TheSpectator

Bermyboy said:

I am about to get a lump sum pension from a country overseas. Do I have to declare it? If so how?

The funds will be to help sustain me for the rest of my life but it is paid as a lump some because I haven't got enough years to get the full monthly payment. I am concerned that the lump sum will take me into a higher tax bracket this year, and deductions will impact on my future finances. 

You will need to look at the double taxation agreement with the country that the payment is coming from. Will it be taxed at source by the foreign tax authority?

TheSpectator

Brie said:

I filled out a tax return due to getting a foreign pension - but mine is paid monthly.  Frankly HMRC had no interest in it whatsoever and I don't think it has impacted on my tax rate (granted mine is very low).  They may simply assume that tax is paid at source "over there" and hence not take it into account.  

They would make no such assumption that it was taxed overseas. If you are declaring it in a Tax Return then it will form part of your tax calculation.

DBdoobydoo

Yes, you absolutely will need to declare it.

It will depend on the double taxation agreement (if there is one) but it's very likely that you will need to pay tax at your marginal rate on the lump sum.

What country is involved & how much is the lump sum?