Yes, but also excluded from the DTA.Originally Posted by jake
At the risk of going off-topic I think it might be helpful to post some concise clarification.
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 also 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' and be treated under the Philippine Tax regime.
Means zero tax paid in UK and subject to Philippine Tax Regime (which is currently rated 0% on private 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 to you by DWP. DWP cannot deduct tax at source.
Your state pension payments will therefore 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 income, unless with a double taxation agreement country you can transfer the tax responsibility/liability to the local Tax revenue authority.
Sorry for the off-topic posting but just want to be sure all the relevent facts are made.
Quote Reply
