Pension wise I would want to remain tax resident in the UK, the Philippine tax laws would probably take 30 percent of any pension, when I finally collect a pension (if I ever get that old) I should be paying next to no tax, pity I won't be able to use my bus pass on the jeepney's
Pensions are a complex gamble, sometimes they pay off sometimes they don't, the problem is the history of general modern day pension investment is not really long enough for anyone to judge if it really is a good way to invest. State pension is not an investment they can take it away anytime they want as it is not an investment funded system, current workers fund current pensioners! Two or three hundred years from now people will have a better idea if this method of managing long term investment works or not but right now for most of us it is a shot in the dark. For me personally as a long term higher rate payer I am not sure that I have received anything like the gains that would justify what I have put into pension funds, most funds are run by computers, those damn things that I program Anyway I really am not sure that the argument for pension saving is strong, 14 years ago a fund of 100,000 quid would buy you 10,000 quid a year now it will buy around 4,000 (if you have some modest guarantee's for spouse and a bit of inflation proofing) in that same time we have had moderate but large enough amounts of inflation so that 4000 figure is even more painful to modern savers. The reason for this is that pension annuities almost always have to be purchased through GILTS in other words the only way to secure a return is to lend money to the government and if your government is Greek where does that leave you The UK's borrowing position is manageable because it is long term, most debt has 10 or more year repayment cycle, currently the government can borrow long term at ludicrously low rates and that is why GILTS are worthless from a pension viewpoint, they have engineered a situation where those who have to invest in GILTS to retire have no choice but to accept the crappy deflated rates they are willing to pay and more to the point that long term debt rate has already locked in the GILT return rates for current pension savers, so unless GILT rates start rising soon guys like us at our age are already stuffed unless we try to purchase annuities from companies like Canada Life who generally seem to have better payouts. Januarius is right self investment should be a big big part of anyone's saving strategy, while most people will see no benefit from ISA's as your capital gains are generally likely to be tiny at best, they are still a great tax avoiding investment, if you have personal cash that you can invest and you are thinking over periods of 2 or more decades then accumulating investments in various ISA's is a great idea because at any point you can liquidate and choose to make a more direct investment that could make you much more. Just wish I had realised all this 20 years ago
Self investment isn't a bad idea at all. But comes with risks all the same. Or if not then will come with low return. There's a trade off there. Whatever one does, the key is to spread the risk. Normally, with company pensions that I am familiar with and I have 3, you can take the risk out of your fund later on by switching to low risk options, when the fund is mature and has been built up. But as your fund builds up in the earlier days you can invest in a range of funds from low risk to high risk, from the UK to Asia and beyond. My risk is spread across 3 providers and across a range of funds. For me, if my employer bangs in x pounds a year and the government bangs in a few bob too then for me that is nothing short of a winner. If one also has other investments then so much the better! For the benefit of those starting off, anybody got any good long term risk free investment suggestions that will pay out handsomely 40 years from now? My impression with ISA's was that they didnt pay back too handsomely either. I bought a few but they didnt perform very well. I have some shares that I have kept by. They too could go pear shaped at some point. But by having those then my risk is spread a little less thinly than relying on any one other investment alone. It used to be said that the only daft insurance policy is the one that you don't take out. That can also be said of pensions. I can convert mine at any time now. This is interesting as it was a shot in the dark for me. I used to know so little about the pension fund I was paying into. But now, that it's getting closer, I am familiar with what I need to know and am glad that my employer paid into the pot for me. It is no longer a mystery. Its the jargon that gets people.
Is there any way you / anyone settling in the Philippines can withold declaration to the Philippine authorities? With the handy utilisation of an offshore account? At least some pension fund providers will pay the pension without deducting tax at source.
I have never heard of any foreigner paying tax here who isn't engaged in some business or other. Simply have your pension fund credit your (HSBC) bank account in the UK and for that account to send a monthly payment to a Sterling (HSBC) account here - you can set up recurring transfers online. As you need cash, convert it into Pesos. Simples!
Yes. Just ask the pension provider / annuity provider to pay it into your account without UK tax being applied.
Don,t they simply pay that into your designated bank account? Or does that change if you shift abroad?
You can still elect to have your State Pension paid into your UK bank account and that's what I would suggest you arrange.
It's not as simple as that. ONLY HMRC are authorised to give instruction on tax deductions. In the words of Benjamin Franklin "In this world nothing can be said to be certain, except death and taxes." At the risk of going slightly off-topic I think it might be helpful to post some concise clarification. Make no mistake UK pensions ARE taxable in Philippines. However... as it stands right now, income from pensions are taxed at a rate of 0% in Philippines. (Long may that continue !!!!) Unless you make arrangements to take advantage of the existing Double Taxation agreements between Philippines and UK, you could expect to be tax liable twice. All Double Taxation Treaties/Reciprical Agreements are highly complex and dealing with them is a specialist area for both UK and Philippines tax authorities. The UK has Double Taxation Treaties with more than 100 countries. The Philippines deals with Double Taxation Treaties with more than 30 countries. Each treaty has different conditions. But in principle and specifically for UK nationals resident in Philippines:- If your pension is a 'public funded (government) pension' (ie: Military, Civil Service and Most Local Authority paid pensions) then it is NOT included in the Tax Treaty with Philippines and MUST be Tax Coded and Tax Deducted at source in UK. Period. If your pension is a UK State Pension (public funded) then it is NOT included in the Tax Treaty with Philippines and MUST be Tax Coded and Tax Deducted at source in UK. Period. If your pension is a non-governmental pension, most often referred to as a Private Pension or Occupational Pension, then this IS INCLUDED in the Tax Treaty with Philippines and CAN be Tax Coded at source in UK as 'paid net of income tax'. Means zero tax paid in UK and subject to Philippine tax regime (which is currently rated 0% on pensions) All pension providers in UK are required to apply a tax code on any payments made. The tax codes are issued by HMRC. The pension provider is prohibited from making any payments to you without a code. Some codes will mean tax payable is zero. National Insurance is not paid on pension payments. The State Pension is an exception to this as it is paid Gross by DWP. DWP cannot deduct tax at source. Your state pension payments will be deducted from your personal allowances, thereby reducing the threshold for 'free-pay' on any other income (ie Occupational Pension) Having the Private/Occupational pension tax liabilities transfered to Philippines can result in very significant benefits. Regardless of where you live, you are liable to UK tax coding on any UK sourced pension income, unless with a double taxation agreement country you transfer the tax liability to the local Tax revenue authority. Interesting eh?
I know someone who has done exactly that with 2 UK accumulated private pension schemes. Quite legally too, I might add. In one case the said person didn't even need to ask the pension provider. They just paid it into his account net of tax anyway. In the other case he just phoned up his pension provider and asked them to pay his pension into his account net of tax and they obliged. Whats more he even got some tax that he paid, refunded from his pension provider and they sent him a notification of tax paid and refunded statement. Both are well know pension providers, evidently, so no dodgy dealings there. He receives both pensions net of UK tax.
Actually, he is a retired plumber that has married a Thai girl. Took early retirement at 57. He has moved here from the UK as his first love is motorbikes. Anyhow, he always paid his stamp and ran a couple of pension schemes for himself for his retirement. Other than that his other "investments" include a number of vintage motorbikes . Anyhow he certainly has enough coming in each month to satisfy the UKBA Spouse Visa requirements.
Claiming State Pension if You Retire Abroad https://www.gov.uk/state-pension-if-you-retire-abroad Interestingly, the Isle of Man pays out £107.45 per week with a £52.45 per week supplement for proper Manx's. Total £159.90 per Week. Currently that is almost 50 quid more than the UK pension. However, this may change if and when the UK reform pensions soon.
Pensioners' incomes rising fastest, says IFS "UK pensioners' incomes have risen faster than all other age groups in the last 30 years, a study has shown. The study from the Institute for Fiscal Studies (IFS) described the trend as "a triumph of social policy", arguing that poverty in old age was being reduced. The research also found that the over-60s are the only age group to have become better off since 2007/08. The findings may fuel the debate over how much protection pensioners should be given from austerity measures." http://www.bbc.co.uk/news/business-22890906
Then you do not know all he facts. I have no intention of making any arguments on this. HMRC MUST code. Pensions are recorded on the PAYE systems. No code from HMRC is a very serious issue. As I said I'm not going to challenge. It's neither my opinion nor my assumption. It's well documented regulation. Feel free to make any research you want (if you have an interest)
This is not an argument. I am just stating the facts. He was issued a P60 end of year certificate from his annuity pension provider. And a tax code from them. But not from HRMC. He pays IOM tax to the IOM Treasury on his pension as he is 100% resident in the IOM, mainly at 10p in the pound on his taxable income. He doesn't pay UK tax and isn't required to. The facts are that he uses an IOM accountant and speaks directly to the Isle of Man Treasury so is upfront with his tax affairs i.e. fully compliant. It's awfully easy to pop in to the IOM Treasury here. I have done it myself. No need to trawl through forums for that purpose, though I would say that of the (HRMC or IOM Treasury) tax employees I have spoken too many tell a different story compared to their colleague(s). Isle of Man UK/Isle of Man Double Taxation Arrangement made on 29 July 1955 as amended by Supplementary Arrangements made on 19 December 1991 and 14 December 1994. I am indeed interested as I will be retiring in the not too distant future and under similar circumstances, pensionwise. I will retain the services of a good accountant to continue to keep me straight.
I guess that recycling in the Philippines is on a more basic level - re-use until broken to save a few Pesos, but not recycling the constituent materials once them item becomes unusable? The most obvious example of this was when I bought a bottle of real Coca Cola from a street vendor for a few Pesos. As I was taking my money out of my wallet, I failed to notice what the vendor was doing with my bottle of coke. She emptied the contents into a plastic bag and she kept the bottle! I would have been happier to have paid a few Pesos more and return the bottle to her for a refund, and she would have saved money on the plastic bag and straw!
That would probably have been a real glass bottle, if I remember correctly from our sari sari the wholesalers are quite strict about getting all the crates and bottles back, so she would have felt under orders to do it that way.
Partially Incorrect. All glass,broken or otherwise has a cash resale value. They put the contents of the bottle into a bag as they assume that you do not wish to take the depositable bottle with you..(as you did not offer to pay) Most Filipino`s will drink from the bottle in the establishment and then return the bottle. If you paid them the deposit then you are free to take the bottle elsewhere.. If lets say you walked away with the bottle after paying the deposit and left it in the street or even in a rubbish bin (or elsewhere),it would be found by someone and they would recieve your deposit by cashing it in. A very simple and effective way for bottle companies to not lose their bottles.
