New tax laws re: government sourced pensions.

[darrow]

I spoke to a tax technician today, nothing has been decided yet, it has not even been agreed, so carry on as before! I also asked about having to declare any offshore accounts by 28th September. It only applies to UK residents. In other words, at the moment, no change, and there might not be yet!

[darrow]

I am fairly sure the DT has been ratified and comes into force from Jan 19, as detailed here:

https://www.gov.uk/government/publicati ... x-treaties

I think you are right Hudswell! The only thing I could find was article 27, still to be ratified. Looks like my 20 minutes telephoning was a time waster.

[Rita Sherry]

darrow

I posted regarding this subject on 12th September 2018 under the heading "From the British High Commission - new tax laws" in response to a post from "Austin 7" following advice from a former colleague working in the International Division of HMRC. Although at that time the Double Taxation Agreement had not been ratified (I believe it now has so far as this part of the Agreement is concerned) my colleague confirmed the relevant provision as to taxation of public sector pensions and stated this was to bring the Agreement into line with all the other countries subject to Double Taxation Agreements. In reality this means public sector pensions will henceforth (January 2019) be taxed in the UK after deduction of the usual personal allowance meaning some people will still pay no tax on the pension. However the pension will still be taken into account for the purpose of Cyprus taxation although any tax deducted by the UK will be discounted. Dependent on how generous or otherwise a person's public sector pension is will depend on how much tax will be payable in Cyprus. The State Pension remains non taxable although yet again is taken into account for ones overall income just as it is if living in the UK.
Ratification of these types of Agreements is usually a formality done through Diplomatic Channels and as the governmental personnel were approaching the annual holiday period I would hazard a guess that at this particular point in time ratification has already taken or about to be taken place.
As I said in my previous post the two certainties in this life are Death and Taxes.

Rita

[Rita Sherry]

darrow

I posted regarding this subject on 12th September 2018 under the heading "From the British High Commission - new tax laws" in response to a post from "Austin 7" following advice from a former colleague working in the International Division of HMRC. Although at that time the Double Taxation Agreement had not been ratified (I believe it now has so far as this part of the Agreement is concerned) my colleague confirmed the relevant provision as to taxation of public sector pensions and stated this was to bring the Agreement into line with all the other countries subject to Double Taxation Agreements. In reality this means public sector pensions will henceforth (January 2019) be taxed in the UK after deduction of the usual personal allowance meaning some people will still pay no tax on the pension. However the pension will still be taken into account for the purpose of Cyprus taxation although any tax deducted by the UK will be discounted. Dependent on how generous or otherwise a person's public sector pension is will depend on how much tax will be payable in Cyprus. The State Pension remains non taxable although yet again is taken into account for ones overall income just as it is if living in the UK.
Ratification of these types of Agreements is usually a formality done through Diplomatic Channels and as the governmental personnel were approaching the annual holiday period I would hazard a guess that at this particular point in time ratification has already taken or about to be taken place.
As I said in my previous post the two certainties in this life are Death and Taxes.

Rita

[Rita Sherry]

Oops hit the send button twice - sorry Dominic can you please delete the surplus one. Thank you

Rita

[Rita Sherry]

Lloyd

Thank you very much for that pointer - I need your grandchildrens' assistance when using computers or mobiles - techno illiterate am I.
Am posting a query to you on Cobalt Air in a jiff.

Rita

[Rita Sherry]

Austin7

Your point re paying twice on pension income which is a public service pension is not strictly accurate although it would appear so. The UK will tax any public service pension in accordance with the scales used by that Government minus any personal allowance entitlement. A resident of Cyprus is liable to pay tax on all their world wide income which will include any UK funded pension but minus the amount of tax already deducted by the UK Government if any.
If someone is in receipt of a public service pension and if such pension i.e. "income" falls below the level at which tax is warranted then they will not pay any tax but said pension will be added to any other income for the purpose of Cypriot taxation so if this sum falls below the level attracting Cypriot tax liability nothing will be paid. Those in receipt of more generous pensions will, as I say above, be taxed at the appropriate UK rate but that sum will be off set by the Cypriot authorities against their liability to pay tax which is still advantageous as the Cypriot tax rate is less than that of the UK. In other words those fortunate to have a generous public sector pension will pay more UK tax as it is higher than they would otherwise do in Cyprus. Please remember this is a reciprocal arrangement and those retired Cypriots living in the UK will have their world wide income taxed in the UK at higher rates than they would here as do others resident in countries already subject to Double Taxation Agreements.

Rita