| The Comments |
Two points of concern in today's ex pat press.
UK accoerding to the Round Town News, the Chancellor is thinking of abolishing the UK tax allowance for ex pats, which would have serious implications. If implemented the reation will be interesting!
In Spain there are changes to IHT-minimm level of 4%, rising to 11%, to bring parity to the different regions,
Tax to be applied at 3 levels-reduced , medium and elevated.
State allowance level should be between 20,000-25,000 euros-not mudh improvement on the derisory present level!
A much fairer system could have been implemented eg
universal state level with a much more realistic allowance, considering how much property has increased since the original level, which has been the same for many years.
Do they really think they have done enough to make this penalising tax fairer to all regions? I think not!
Regarding QROPS- isn't there something in the pipeline to make it more difficult for expats to get their lump sums early?
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I have my doubts about the veracity of the rumour in RTN. It would be very difficult to insist that tax be payable in UK on, for example, civil service pensions if we were to be robbed of the UK personal allowance. A further point: the current chancellor is due to lose his job in 2015, so time is very short. I know he can be, and certainly has been, very stupid in past budgets, but even so it would be almost certain loss of votes from the many expats who rely on CS etc pensions, many of whom tend to veer to the right politically.
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This is a very big problem for all ex-pats. It would mean an instant loss of 20% of your income! Very difficult for some of us!
Again the question of QROPS comes up. On the face of it there seems to be some advantagein doing this. However I understand that the fees involved can be between 10% and 14%! Also what the buyer is not told is that if the person then returns to the U.K.( to live) at any time in the future he will be liable to 55% tax on any amount over the 25% tax free amount. As an example if the fund was £200,000 then £50,000 would be tax free and then 55% tax on £150,000 (£82,500) would be due.
There is no time limit on how far back the HMRC can go with this penalty. In other words if you 'broke the rules' of the UK pension 20 years ago, when you return to live in the UK you are liable for this penalty. Before rushing into QROPS make certain of all eventualities before starting and do not just accept what the nice salesman is telling you. Get proper advice from HMRC before doing anything.
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Stephen
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I think, before everyone starts running around and screaming the sky is falling, the words "may be considering changes" need to be taken in context. Plus, something the free papers here (linked to companies who provide QROPS) missed out is Tax experts believe the personal allowance will still be made available to Britons living in the EU, but other countries could face changes. These include destinations such as the US and Australia which are popular with British expats.
After the debacle with the WFA and the EU ruling that expats should also get it, I very much doubt if the EU would go along with a separate tax allowance for UK and EU residents who get an income from UK.
Unless, of course, the UK withdraws from the EU which some on here are advocating without actually looking into the consequences.
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Talking about leaving the EU-after Channel 5's "Gypsies on benefits and proud," I think a lot more will want to leave the EU! So touching so see them so appreciative of all the help"she" gives them. If you haven't seen it yet, watch it, and wait for the air to turn blue!
I sometimes hear ex pats saying they want Britain to leave the EU-clearly, they have not thought about the consequences, not just tax, but health care too.Just think of all the ex military, teachers, policemen, civil servants etc out here,weeping at the thought of their humungous pensions being so heavily taxed!
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I always worked in the private sector and over the years I have no doubt that I earnt substancially more than I would if I had taken a job in the public sector. Surely everyone knows that the reason most local authority workers, teachers, police etc opt for these roles is that generally they are more secure and you get a better pension.
Nothing has changed - so why the sour grapes?
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Don't argue with an idiot, he will drag you down to his level and beat you with experience.
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There was an article on this on March 25 in the DT.
http://www.telegraph.co.uk/finance/personalfinance/expat-money/10719777/Expat-tax-break-threatened-spelling-bad-news-for-pensioners.html
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Yes, acer, £6/13s/9d a week when I joined up (the pay, not the pension). I can now take solace that I can draw my "humungous" military pension in my dotage. Why, I may even take a trip to Camposol and wave a few jars of Patak's curry paste in their faces.
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Acer, I too am an ex civil servant and my husband is ex navy. Sour grapes sums it up. I was tempted to reply to pension post but decided not to waste my time. They always take a "poor me" attitude, everyone has got it easier than them , it will never change.
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What have sour grapes got to do with it? I am saying that all these people who hope Britain leaves the EU have not thought of the consequences for themselves, especially if they have a government pension, and many ARE humungous, it would be like turkey's voting for Christmas!
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And of course your comments were completely neutral. You have no feelings towards the people who will be "weeping" over the loss of a part of their "humungous" pensions.
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Please don't assume that you know what my feelings are! I am merely stating that those out here who want Britain to come out of the EU, have not thought of the implications. In fact my husband receives a government pension( but not humungous)
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I don't have to assume, you make your feelings perfectly clear.
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As has been mentioned in previous posts about tax we had to pay extra tax 6 months after our purchase of the property because the perceived house value was greater thanbthe price paid , but on meeting our solicitor last week in spain she informed us that the tax man when looking at IHT upon death or future sale can now only use there perceived value foe calculating the IHT not the purchase price so in the end 8% paid now against a much higher figure IHT in the perhaps not to distant future. As for comming out of the EU, for all the talk about Cameron getting things "Back" to the uk ie boarder controls etc. It seems hes not far off the mark as the northern countries are vwry quickly comming around to his way of thinking and the EU gravy train needs a total reform, and I dont think this will be achieved by 2017 so the vote could be pushed back a couple of years till the thing is sorted out properly and common sense prevails. For all the posturing of the French etc. we cant reasonanly come out and even moreso they cant afford to see us go, as was demonstrated by the German Chancellor recently
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