Living abroad tips and hints for money savers

Oldernotwiser

gfplux wrote: »

I feel very sorry for those people resident outside the UK and still get their Government Pension paid nett. What a silly and old fashioned attitude to the world!

It's neither actually. It means that the UK government, who is paying the pensions, saves money and doesn't have a chunk of it disappear as tax to another country. Seems quite sensible to me!

gfplux

I agree sensible if you live in the UK. However if you live in a new adopted country you want that country to benefit from as much Tax revenue as possible. Wouldn't you?

droopsnout

Interesting question.

How far do you go? Are you happy to take the step of becoming a national of your new home country - changing nationality? (I mean "you" in the widest sense!)

Oldernotwiser

gfplux wrote: »

I agree sensible if you live in the UK. However if you live in a new adopted country you want that country to benefit from as much Tax revenue as possible. Wouldn't you?

Certainly sensible for the UK government and pensioners. There's enough fuss made about public sector pensions these days, without having a large chunk of that pension going straight into another government's coffers.

droopsnout

Why should I pay tax to a government that does nothing for me? My services are provided by the French government. I think I ought to pay for them.

gfplux

My adopted home country's Tax payers (and me) through the Government pay for the infrastructure of the Luxembourg Country.
I visit the UK as often as I might visit any other "foreign" country.
If you are resident in an adopted country it surely is in your interests that any tax due on your income/pension should go to that state and not the UK.

I believe Nationality is a separate subject and is more personnel than electing to pay Tax in your adopted country. It is also more complex as it may enable someone to stay in a particular country (ie the USA). However when it comes to the EU all citizens have a right to work, live and reside in any EU country. I know I am a foreigner to Luxembourgers. I will not forget that and it perhaps colours my attitude to other "foreigners" who might live in England for example.

Oldernotwiser

droopsnout wrote: »

Why should I pay tax to a government that does nothing for me? My services are provided by the French government. I think I ought to pay for them.

But the government IS doing something for you if it's paying your occupational pension. It doesn't make sense for a chunk of this money to go direct to another country which you'll be supporting by paying property taxes, VAT, tax on state pensions and earnings etc.

EdInvestor

Oldernotwiser wrote: »

Depends what you mean by a"state pension". If you mean your old age pension, then it's taxable in France, if you mean an occupational pension from the state as in Civil Service, teachers etc, then it's taxed in the UK. If you have both then each will be taxed in different countries , which can be quite advantageous.

The UK's high tax free allowances could be handy here - you can "earn" almost 10k p.a. in pension income before paying tax if you are over 65.

So let's say you had a teacher's pension of 10k taxed in the UK.It would be paid tax free. Then you have your state pension paid in France - which might well be covered by that country's lower tax allowance and also be tax free.

So your net tax payment would be lower, whereas if both pensions were taxed together in either country, you would likely pay more.

Surprisingly, despite the large numbers of Brits retired abroad, it seems that very few have really looked into the financial basics of their new country and worked out how they can be used to their advantage in combination with UK-derived income and assets.

droopsnout

Oldernotwiser wrote:

But the government IS doing something for you if it's paying your occupational pension.

I rather thought that my local authority employer and I as an employee had paid the money in to my occupational pension fund as monthly pension contributions. That is to say that that money is MINE, paid out of my salary for donkey's years, not the State's.

The home country is maintaining roads, equipping hospitals, educating children, housing the poor, etc., etc., and I would rather be helping towards that in the country where I live rather than the country that I opted to leave (whether temporarily or permanently).

Right now, the only thing that the UK is doing for me is providing ambassadorial and consular facilities. (Oh, and checking my emails, photographing me entering and leaving the country, following my movements by scanning my passport, following my text messages from my UK SIM, and taxing me in order to pay for these Big Brother activities).

If I return to the UK, I am effectively stateless for a year as I wouldn't qualify for any benefits for twelve months.

So I don't think I owe anything more than two bob a week to the UK government, just to cover the consulate in Bordeaux, or wherever it is. (I've never used one). On the other hand, I'd really like to be able to tell my neighbours that my taxes are directly contributing to the lifestyle I'm enjoying in their country.

droopsnout

EdInvestor wrote: »

Surprisingly, despite the large numbers of Brits retired abroad, it seems that very few have really looked into the financial basics of their new country and worked out how they can be used to their advantage in combination with UK-derived income and assets.

I have found that every attempt to get to grips with these things leads to confusion and ambivalence.

As far as I can see, my teacher's pension is paid by the State in the UK, and it insists on taxing it itself. I don't like it, but that's how it is. No room for discussion.

My UK State pension will be paid by the State, too. Now am I allowed to have it paid gross, then declare it to the French authorities? Or does the UK tax it EITHER at source (apparently not, if an earlier post is correct) OR does it add the State pension to my occupational pension, then tax just the occupational pension on my total income?

All my UK income, taxed or not, is declared to the French authorities, who know just how much tax I'm paying to the UK.

Whenever I have approached the specialist firms who advertise in the expat press, it seems that because I'm just an ordinary pensioner, with no juicy assets tucked away anywhere, I'm not worth advising, as they can't sell me anything! They just don't want to know.

Finally, the expat press does quite a good job of advising how to complete tax forms, and explaining what ways there are of reducing tax liabilities, and whilst that's never a complete substitute for professional advice, it is generally sufficient for the ordinary punter to hazard a guess as to whether an expert could find a way round some form of taxation or another.

PS - Where did the £10K allowance figure come from? The Tax Allowance for over-65s (which I'm not!) is £9030 for 2008-9. (My allowance is £6035).