I remember posting something here on this many years ago but couldn't find it so many apologies if this post is a repeat. Anyway it's always good to update sometimes, especially on topics that often see changes in regulation and here I have the opportunity to post the latest information. Besides which I'm actually here in the Philippines now and also actually receiving a few pensions. I currently only pay a small amount of UK tax but I'll soon be receiving my UK state pension and despite the good increases in Personal Allowances I'll find myself subject to paying some hefty amounts UK tax. Reciprocal social security agreements with other countries go back to the 1950's Depending on the specific Agreement/Treaty signed it generally allowed Social Benefits and Uprating Regulations to be applied to pensions both ways. Means that the UK government would agree to uplift pensions of UK citizens abroad if other countries also agreed to boost the pensions of their citizens living in the UK. Although the UK state pension is payable world-wide it is only uprated/index-linked abroad when there is a legal requirement to do so. Means a UK State Pension payable to a resident in the Philippines gets automatically index-linked increase year-on-year. Interestingly, the reciprocal Agreement/Treaty with the Philippines, as with many other countries, includes what is termed a 'Double Taxation' Treaty. Normally, where taxable, any UK based pension income will be taxed at source in the UK. However, if you are resident abroad in a country with a 'Double Taxation' Treaty and you make a claim for relief with HMRC on the basis that your pension will be taxed in your country of residence, then HMRC will authorise payment of your pension without deduction of tax. The Philippines current has a tax rate of 0% on income from pensions. So any pensions paid to you in the Philippines would be tax free provided you have made the appropriate legal declarations to HMRC. Each reciprocal Agreement/Treaty is individual and may become complex. For the Philippines there is an important caveat to all this. The specific agreement does not apply to the UK State Pension nor to any 'Government Pension' or Purchased Annuities. Just what is currently categorised as a 'Government Pension' can be found in the HMRC International Manual INTM343040 linked here:- http://www.hmrc.gov.uk/manuals/intmanual/INTM343040.htm In my own case both my UK State Pension and my Civil Service Pensions will remain subject to UK tax. All of my Private Occupational Pensions can receive full relief from UK Tax Now that I have my 13a ACR card I need to visit the local BIR offices, file my registration via form 1901 and secure a TIN (tax identification number) and a COR (Certificate of Residence) Then fill out my HMRC 'Double Taxation treaty relief at source from United Kingdom income tax' and submit tother with my TIN & COR I realise this post will only be relevant to a small group of folks but it's an important issue and I'm hopeful all will work out well for me.
