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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4983
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am ex british military aged 44 and receive a full military

Resolved Question:

I am ex british military aged 44 and receive a full military pension. I am living in Belgium and have just recieved a letter from my bank to say because I have an ISA I may have to repay tax at 20% to HMRC on any payments into that ISA since I moved overseas..unless I am a UK tax payer.. Last year I recieved a letter from HMRC to say my new tax code is 984L does this mean I am a UK tax payer?
Would really appreciate your help as this is the extent of my savings
Many thanks
Carey Foran
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Lets us separate the two income sources -

Your British military pension is taxable in the UK and you are entitled to your personal allowance against it. So you are a UK tax payeras far as that goes.

Your ISA savings are tax free so long as you are UK resident for tax purposes.
Once you leave the country, you can retain any existing ISAs that you may have but you would not be able to make any further investments into them. They may be taxable in the country you move to i.e Belgium.

More information on this can be found on Page 5 here
http://www.griffins.co.uk/assets/KeyGuidesOct%2713update-Livingabroad.pdf

and here under "DO your Homework"

http://www.thisismoney.co.uk/money/mortgageshome/article-1612877/Moving-abroad-Pensions-tax-and-savings.html


I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.
Hi
Thanks for your speedy reply, so basically you are saying that HMRC will be taxing me on the investments I have made into my ISA in the four years since living in Belgium even though I pay UK Tax on my military pension.
My next question is will that be 20% tax on the interest earnt, or 20% tax on the whole amount because in total its approx £22,000..
Carey
Expert:  taxadvisor.uk replied 2 years ago.
Carey, thank you for your reply.

Income tax is levied on income and not capital and therefore you would pay tax on the interest earned on your ISA savings since leaving the UK.

I hope this is helpful and answers your question.
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.