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UK Tax and why am I paying it ?

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dinky1160


Joined: 19/06/2009
Posts: 1

Message Posted:
19/06/2009 17:05

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Message 1 of 23 in Discussion

I'm in receipt of two local authority pensions, both police, in the UK. My income is paid into my UK bank account. I am paying tax in the UK. Is it possible to pay tax here rather than in the UK and if so, are the allowances and rate of income tax here in the TRNC lower than in the UK ?



Nunu1


Joined: 31/03/2008
Posts: 536

Message Posted:
19/06/2009 18:28

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Message 2 of 23 in Discussion

Hi Dinky1160,

I assume that you live permanently in TRNC? If so or you spend less than 90 days a year in the UK you should be UK Tax exempt. You would need to speak to Citezens advice UK or a good accountant.



The rules change from year to year and no doubt a lot recently in order for the UK Polititians to fiddle their taxes and expenses!!!!!!!!!!!!!



You may be exempt from TRNC tax.again you would need to contact an accountant in TRNC. It depends if they class it as income or tax free pension?



Good luck!



nunu1



elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
19/06/2009 18:35

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Message 3 of 23 in Discussion

Pensions from the Social Security or the Government here is free of tax but there is pressure now and rightly so from Turkey to make them liable to taxation like any other earnings. I do not think a UK pension qualifies for tax exemption here but on the other hand I do not think anybody here takes any notice of what you earn abroad.

ismet



wanderer


Joined: 05/02/2009
Posts: 1653

Message Posted:
19/06/2009 19:39

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Message 4 of 23 in Discussion

http://www.cyprus44.com/forums/14888.asp

If you read from post 7 onwards it appears that you are not able to get away with paying no tax

Unless someone knows differently



Ismet

I wish the UK tax man was as laid back as your comments infer



elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
19/06/2009 20:19

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Message 5 of 23 in Discussion

Wanderer,

The tax man here can afford to take it easy because we have Turkey making up all the deficits. I bet if UK had such an uncle, they would afford to take it easy too!!

ismet



CarrieRBag



Joined: 23/12/2008
Posts: 1374

Message Posted:
19/06/2009 20:26

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Message 6 of 23 in Discussion

Sadly, UK pensions are subject to UK tax at source, no way round it I am afraid. Even if it were paid directly to here (as my husband's is), it will still be taxed at source.



ilovekibris


Joined: 18/05/2009
Posts: 394

Message Posted:
19/06/2009 20:38

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Message 7 of 23 in Discussion

Msg 5,

You've summed up perfectly what lies at the root of the downfall of the Turkish Cypriots.



elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
19/06/2009 20:42

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Message 8 of 23 in Discussion

Thank you I love Kibris. I have been advocating for years that Turkey should stop bailing out the Turkish Cypriots and back up their irresponsible financial actions.

ismet



fire starter


Joined: 19/06/2008
Posts: 3401

Message Posted:
19/06/2009 21:41

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Message 9 of 23 in Discussion

dinky, get them paid into/ or over to an offshore account like bank of scotland offshore ,and then withdraw from a cash machine. the cheapest way. you can also put a check into a bank here and it will clear in 28 days,

use your trnc address as the account address then you should have no problems.

the bank of scotland is the only account which doesn't charge for having one/monthly fee as yet, but now as being taken over by lloyds maybe things will change? wiating to see!



girne 29


Joined: 06/12/2007
Posts: 1488

Message Posted:
20/06/2009 01:34

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Message 10 of 23 in Discussion

It would appear Pensions would be taxed twice, at source and in TRNC,as I doubt there is a double taxation agreement between the two countries.



nostradamus


Joined: 15/04/2008
Posts: 557

Message Posted:
20/06/2009 07:38

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Message 11 of 23 in Discussion

There are only a very few countries whose double taxation treaties with the UK cover government pensions. There is no double taxation treaty of any kind with the TRNC. ROC is one of the countries where you can get your govt. pension free of tax in UK although you have to pay tax in Cyprus - this is at much lower rates. It doesn't matter where your bank account is. If you know anybody in the south and can establish an address there you may be able to swing this. You need to complete a UK tax form to apply for your pensions to be paid gross - form available on line - and get the form signed and stamped by the ROC tax authorities. You then return it to the UK overseas tax dept and your pensions will be paid gross.



waddo


Joined: 29/11/2008
Posts: 1966

Message Posted:
20/06/2009 08:08

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Message 12 of 23 in Discussion

Message 1 and 11, that is possible - However (don't you just hate that word!) - the first and most important step in all of this is that you must first obtain a RoC ID card to prove that you live there. Having a mate in the RoC who is willing to put their income on the line to help you defraud the tax man is simply not enough.



I am also stuck in this position and have approached both UK and RoC tax offices over the issue - the end result is always the same: Sorry there is no way around the problem until Cyprus ceases to be a divided Island, at that point the double taxation agreement will apply to both parts of Cyprus and you will be allowed to make up your own mind on paying 20% tax to the UK or 5% tax to Cyprus.



If it happens, I wonder which tax I will pay?????



Real bottom line is that if you are paid from Government sources then you pay tax at source - no way out of it!



mikemans


Joined: 12/04/2009
Posts: 103

Message Posted:
20/06/2009 08:45

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Message 13 of 23 in Discussion

No one has mentioned that if you tell the UK pensions department you are exp[at, then your pension will not increase in line with normal pension awards annually. If you are still UK domiciled then you are subject to all UK tax laws. State pension cannot be taken tax free and is added to earnings for assessment. Yout police private pension can only be paid tax free if it is below the allowance threshold and as you have the state as well it is obvious that this rule does not work for you.



Additionally, you would be well advised to keep your assets away from TRNC taxation as it is fraught with problems in correct assessment and refunds would be a nightmare to obtain. If you are UK expat, then keep the bulk of your capital offshore in say Jersey, IOM etc, have pensions paid into an account that offers a cash card and withdraw at most free access ATM's.



Don't forget if you are UK domicile, you are subject to UK inheritance tax on world assets you own, current exemption rate is 325K.



bridie


Joined: 18/09/2008
Posts: 308

Message Posted:
20/06/2009 10:12

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Message 14 of 23 in Discussion

There are 162 countries where your pension is pegged from the day you officially left the UK. North Cyprus is not one of them. Having lived here for nearly thirty years and receiving documentation, I can assure you this is fact.



sporty


Joined: 06/12/2007
Posts: 685

Message Posted:
20/06/2009 12:31

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Message 15 of 23 in Discussion

just had a thought,does turkey have a double tax treaty with uk? because if they did you may be able to bring it in via a turkish bank?not sure?



waddo


Joined: 29/11/2008
Posts: 1966

Message Posted:
20/06/2009 15:19

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Message 16 of 23 in Discussion

Sporty, Yes, Turkey has a double taxation agreement with the UK but if you have been honest in the first place and told the UK Tax office (oh foolish me) that you are living in Cyprus, then you still can not make use of the Turkish double taxation agreement.



Just to make another point clear please - "No one has mentioned that if you tell the UK pensions department you are exp[at, then your pension will not increase in line with normal pension awards annually." - this is true but it is true of the State (Old Age) Pension and not of other Government pensions such as Civil Service or Armed Forces.

I can remember the first time I read about my pension not being subject to normal increases - My Heart Stopped!!!



scruff


Joined: 15/07/2008
Posts: 1070

Message Posted:
20/06/2009 15:42

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Message 17 of 23 in Discussion

This bit about not getting State Pension increases seems to be a bit hit & miss. I'm getting them. I applied for my State Pension from the TRNC. I wasn't receiving it in the UK. I know many people who are receiving increases.



harita


Joined: 14/08/2008
Posts: 1343

Message Posted:
20/06/2009 17:27

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Message 18 of 23 in Discussion

Message 6 .. CarrieRBag .. Sadly, UK pensions are subject to UK tax at source, no way round it I am afraid.

This only applies to private pensions ... State pension is paid no tax deducted ...

From message 12 .. waddo .. Real bottom line is that if you are paid from Government sources then you pay tax at source - no way out of it! .. Does not apply to your state pension .. No tax deducted at source ..

Yes you do get increases to your state pension living here ...



the butler


Joined: 22/06/2007
Posts: 1958

Message Posted:
20/06/2009 17:59

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Message 19 of 23 in Discussion

Hi all,



Although state pensions are not taxed at source in the uk. They are counted as part of your unearned income.

For example If you have rental income from properties that you own when you fill in your tax returns, your state pension has to be counted in. If you exceed your tax allowance,you will have to pay tax on the whole.





The butlers wife



tinker


Joined: 14/08/2008
Posts: 156

Message Posted:
20/06/2009 18:38

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Message 20 of 23 in Discussion

What's a tax return ... Haven't had one of those since 2004 .. LOL



the butler


Joined: 22/06/2007
Posts: 1958

Message Posted:
20/06/2009 19:26

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Message 21 of 23 in Discussion

Hi tinker,



you are a lucky so & so wish I could say that.







The butlers wife



mikemans


Joined: 12/04/2009
Posts: 103

Message Posted:
20/06/2009 20:05

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Message 22 of 23 in Discussion

To those getting indexation on state benefits whilst expat, I suggest you may be in breach of the UK tax regulations, however having said that just enjoy and do not ask the UK pensions office for guidance, you may be dissappointed. (sorry to disagree with earlier posts on this, TRNC is not part of EU) Are you sure you are non UK domicile and had your passport stamped accordingly, if not then you are not expat even though you may have applied for residency in TRNC.



Regarding pension income they are earned income and not unearned income and are subject to schedule D tax, rental income is chedule F for tax and has different tax allowances. D gives personal allowances whilst F is unearned income and does not get the same tax breaks. Schedule E is for emplyee earned income. In addition do not forget age allownace benefit and the fact that you lose 2 for every 3 earned above the allowable level. For those interested many web sites give excellent examples of how this affects people.



waddo


Joined: 29/11/2008
Posts: 1966

Message Posted:
20/06/2009 20:24

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Message 23 of 23 in Discussion

Just to get another slant on the matter.



Any ex service people in the South reading this please can you let us know if you are eligible for the UK/Cyprus double taxation thing and if so do you pay tax at source in the UK or at the 5% rate to the RoC?



All helps guys.



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