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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a UK pensioner paying my taxes in the UK as a non resident,

Customer Question

I am a UK pensioner paying my taxes in the UK as a non resident, but living in a mediterranean country for most of the year.
I do a tax return to the local IR and are taxed additionally only for the extra.
I visit the UK for 2-3 times per year but never exceeding the 92 day rule.
My family circumstances have now changed and I wish to return to the UK as a resident again after a ten year absence..
Can you give me an indication of my tax implications present and future?
I would be grateful if you do.
JS
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.Can you tell me what sources of income you have please. What is your date of birth? Which country do you live in?
Customer: replied 1 year ago.
1. UK private pension
2. UK state pension
3.DOB 1948
4.Greece
Expert:  TonyTax replied 1 year ago.
Thanks.

Leave this wiith me while I draft my answer.
Expert:  TonyTax replied 1 year ago.
Hi again.

Normally, pensions are taxed in the country that you live in so it's odd that you have continued to pay UK tax as a non-UK resident. Certainly, that applies to the state pension and would only not apply to the private pension if it was derived from a "government service job" such as one in the civil service or the MOD/armed services.

When you return to the UK, not much will change since you are already paying UK tax. Split year treatment won't apply since you don't appear to have been treated as a non-UK resident, given that you have continued to pay UK tax. You should not have to pay Greek tax once you return to the UK, though I'm no expert on the Greek tax system. The first £10,600 (£10,660 if you were born before 6 April 1948) of your income will be tax free and you will pay tax at 20% on the next £31,785 if your income is that high.

As you appear to have continued to pay UK tax as a UK resident individual would, you shouldn't have to complete a tax return at the end of the tax year you return to the UK in but you should contact HMRC on the number here to inform them of your new permanent address. You might also ask them to review your 2015/16 tax code to make sure you are getting the personal allowances you are entitled to. You should ask the Greek tax people or a tax adviser there what your obligations are and what you need to do to close your Greek tax file since you are returning to the UK

I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Dear *****,
Thanks for the advice.
One more question please!
I have non UK income in the form of a dividend and property rent.
Could there be any past liability for it once I return to the UK?
I would appreciate your further advice.
Kind Regards
John
Expert:  TonyTax replied 1 year ago.

If you remained treated as UK tax resident whilst spending most of your time abroad, then you were liable for UK on your worldwide income. You would normally have completed a P85 when you left the UK so that HMRC could issue NT (no tax) codes on any UK PAYE sources of income.

Technically, you have probably been non-UK tax resident even though you were paying UK tax on your pensions because of the number of days you were spending in the UK whilst living in Greece so if I were you I'd let sleeping dogs lie. When you do resume full UK tax residence, then you will need to disclose your non-UK income from that point but you should get credit for any tax paid abroad on that income against the UK tax liability on the same income.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15882
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Dear *****, Good Morning,

Just one more question if I may, even if it costs.

The current Greek tax authorities are being pushed by the EU and are becoming aggressive on tax collection.

In the event they come after me and demand to pay all my tax locally and going back in time,what can I do?

Regarding my ties with the UK, I have maintained everything that I had, pre non residence.

1. House

2. Car

3.GP Services

4.Private Health Insurance ( BUPA )

5.Bank accounts

6. Credit/ Debit cards/Store cards

7.Small mortgage

8.Utilities in my name

As I mentioned I use the 92 days visit allowance and in essence I have played it to my convenience.

I have a son who is a medical doctor and works for the NHS.

My questions:-

1. Will the HMRC agree to it and to what extent ?

2. If so, how far back can the HMRC go with such payments?

I would appreciate your advice.

Thanks

John

Customer: replied 1 year ago.

Dear *****, Good Morning,

Just one more question if I may, even if it costs.

The current Greek tax authorities are being pushed by the EU and are becoming aggressive on tax collection.

In the event they come after me and demand to pay all my tax locally and going back in time,what can I do?

Regarding my ties with the UK, I have maintained everything that I had, pre non residence.

1. House

2. Car

3.GP Services

4.Private Health Insurance ( BUPA )

5.Bank accounts

6. Credit/ Debit cards/Store cards

7.Small mortgage

8.Utilities in my name

As I mentioned I use the 92 days visit allowance and in essence I have played it to my convenience.

I have a son who is a medical doctor and works for the NHS.

My questions:-

1. Will the HMRC agree to it and to what extent ?

2. If so, how far back can the HMRC go with such payments?

I would appreciate your advice.

Thanks

John

Expert:  TonyTax replied 1 year ago.
1 You told me that you had continued to pay UK tax on your pensions even though you appear to have been technically non-UK resident so you don't have any worries as far as HMRC in the UK is concerned. As I said in my answer, most pensions are taxed in the country of residence of the recipient.

2 Even if you didn't pay taxes in the UK on your pensions, so long as you maintained your non-UK residence status, there would be no problem. Looking at the first line of your question again "I am a UK pensioner paying my taxes in the UK as a non resident, but living in a mediterranean country for most of the year." it is somewhat ambiguous as to whether you have been paying UK tax or not.

As far as the Greek tax authorities are concerned, I'm not an expert on the Greek system but Article 10 paragraph 2 of the UK/Greece double tax treaty here says that a UK pension which is taxable in Greece because the recipient is resident there will be exempt from UK tax on that pension. If you have paid UK tax and the Greeks come after you for more, you'd have to try ro reclaim the UK tax but you can only go back four years.
Customer: replied 1 year ago.
Thanks Tony,
This is good and potentially useful advice.
John
Expert:  TonyTax replied 1 year ago.
Thanks.

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