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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I have leave to remain in the UK since 02/2013 as refugee.

Customer Question

Hi,
I have leave to remain in the UK since 02/2013 as refugee. I am working as self-employed since 07/2013 as programmer. I'm filling my self-assessment and paying the income tax and NI.
I was working with a company abroad (in Syria) from 05/2007 until 06/2013; I continued to work with the same company remotely from the UK from 07/2013 until 06/2015, where I terminated the contract. This company provides pension scheme and they are going to transfer my pension and end of service entitlements to my UK bank account soon. How this is going to be taxed?
Thank you and best regards,
Fawaz
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello Fawaz, I am Keith, one of the experts on Just Answer nd pleased to be able to help you with your problem. Yes it will be taxed, if you can get them to transfer the money into an UK pension scheme then it won"t, but if you are going to do that you are well advised not to let it pass through your own account. Before I can give you more advice can you please tell me your age?
Expert:  bigduckontax replied 1 year ago.
You have given me a poor rating, yet you have not responded to my request. If you do I can help you further.
Customer: replied 1 year ago.
Hi, I'm 40 years old
Customer: replied 1 year ago.
I haven't given you a rating yet!!
Expert:  bigduckontax replied 1 year ago.
HMRC RPSM05101510 gives the following information: 'A member may have a refund of the contributions they have made to an occupational pension scheme (less any amount used to ‘buy-back’ the member into the State Second Pension) where they have left pensionable service within two years of joining. This is called a short service refund lump sum. More information on this payment can be found atRPSM05101520 to RPSM05101530." Depending when the scheme started for you you may be just under the wire. The Pensions Advisory Service give the following rather gloomy news: 'Contributions refunded from a defined benefit or money purchase pension scheme are taxed at 20% on the first £20,000 and at 50% on the remainder.' It all depends on the amount which is going to be paid.
Expert:  bigduckontax replied 1 year ago.
I am so sorry, some other customer has!
Customer: replied 1 year ago.
Sorry, I didn't understand what is that all about. could you please explain more what will be taxed and how to claim a refund?
and also even that I was living and paying tax in Syria from 2007 until 2013 I still have to pay tax again in the UK?
Customer: replied 1 year ago.
The amount of the pension will be around £12000 and it will be transfer to my UK bank account.
Expert:  bigduckontax replied 1 year ago.
A pension pot of 12K being refunded is below the 20K limit so there will be a tax liability of 2.4K.
You were non resident in the UK for most of this period therefore your Syrian emoluments are not liable to UK taxation. Thereafter, once you moved to the UK your Syrian income would be subject to UK taxation. Unfortunately, the UK does not have a Double Taxation Treaty with Syria. If it did your Syrian tax deductions would be allowed as a tax credit against any UK liability on the same income stream, so there is a danger here that your income could be taxed in both jurisdictions.
I am so sorry to have to rain on your parade.
Customer: replied 1 year ago.
Does the UK have Double Taxation Treaty with Lebanon or Jordan? as from 2012 the head quarter of the company moved to Lebanon and I was working remotely with the branch located in Jordan, so if I asked them to make two transfers, one for the period 2007-2011 and the other 2012-2015 does this make any difference?
Expert:  bigduckontax replied 1 year ago.
Yes, the UK has Treaties with both Lebanon and Jordan. Any tax deducted in those states is allowable as a tax credit against your UK liability on the same income streams.
Customer: replied 1 year ago.
So what should I do to benefit from this?
Expert:  bigduckontax replied 1 year ago.
When you do your self assessment tax return you enter the foreign income and tax deducted in a supplementary SA106 return along with your SA100. You will need a separate SA106 for each country.
Customer: replied 1 year ago.
In that case I don't have to pay any tax on the portion (2012-2015)? also do I need any supporting documents? or proof of tax deduction in Jordan and Lebanon?
Expert:  bigduckontax replied 1 year ago.

No proof is needed when you submit the forms. It is useful to have supporting evidence in the event of an inquiry. The Treaties do not protect you from differences in rates of taxation.

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