UK Pensions paid to non-UK residents

UK Pensions paid to non-UK residents

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I have a client working in the NHS on a salary and with private work. She is Self Assessed. No problem

She is moving to Qatar to live and work there for between 3 and 6 years. She will start to draw her NHS pension when she is in Qatar and has asked whether this is taxable in the UK.

According to HMRC’s website even if she is not UK resident, UK pensions, rental income, interest and earnings are subject to UK tax. She also intends to return to the UK for yes than 91 days on average a year. She would like to work for the NHS during these periods.

My view is that her NHS pension and any other UK earnings would be subject to UK tax by Self Assessment and her earning in Qatar would be subject to local tax. She will maintain a house in the UK.

However she is being told by colleagues also about to do the same that their NHS pension would be paid to them gross and would not be subject to UK tax when they live and work in Qatar. Is this advice correct or just opinion ‘from a bloke down the pub’?

Replies (5)

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By K81
20th Oct 2015 13:32

personal allowance

income arising in the UK is taxable in the UK.

Presumably your client will be entitled to her personal allowances & a tax code will be issued to the pension provider once it commences, if less than her pa's no tax will be deducted.

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Replying to Bob Loblaw:
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By HeavyMetalMike
20th Oct 2015 13:47

Is there a double tax treaty with Qatar?

If so you can apply for pension to be gross on the basis that it will be declared in Qatar

You apply to HMRC who then refers it to Qatar taxman.

I've done this with USA resident. Have a look to see who you apply to first. I'm sure it's the non-res section of our own HMRC........

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Portia profile image
By Portia Nina Levin
20th Oct 2015 13:55

I note that you were worried that your client had received advice from a bloke down the pub, so you came here and asked a random bunch of halfwits.

The fact that it is an NHS pension is particularly pertinent. On the assumption that your client is not a national of Qatar, her NHS pension is taxable in the UK. Articles 17 and 18(2) of the treaty refer.

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By paras007
20th Oct 2015 14:37

Less than 91 days

OP,

You state that your client intends to visit the UK for less than 91 days on average a year. What is the relevance of that?

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By danielgricks
21st Oct 2015 10:37

I think Portia is Right

Portia does herself a disservice by calling herself a halfwit.

HeavyMetalMike was right to check the latest UK/Quatar double taxation treaty'

Portia's reference to the 2010 Consolidated treaty articles 17 and 18 was right. Part quotes:

Part of Article 17 (pensions)

(1) Subject to the provisions of paragraph (2) of Article 18 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 shall be taxable only in that State.

Part of Article 18 (government service)

(2) (a) Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State - would seem t refer t the NHS

I will refer this to my client and ask her to refer to her colleagues who have had conflicting advice.

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