Should I still pay tax.?
I have been living in China for four years,and am not entitled to any benefits such as the use of an MP,winter fuel allowance,NH treatment free transport,or even a pension increase,yet I still pay tax on my works pension and have been doing so for the last four years,it seems as if I am paying and getting nothing in return,so my income which is my pensions are slowly shrinking,and with the state of the economy at the moment it is now at an all time low as I am paid in pounds.Should I still be paying tax when I am no longer a resident of the UK,and have retired to China.N.S.Miles
Unfortunately I dont know the answer to this, but maybe you should contact the citizens advice centre?
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If your works pension is still being paid into a British bank account as opposed to being sent direct to you in China, then you will still pay UK Income Tax on it where necessary. Alternatively, have it sent direct to your Chinese Bank, and pay income tax on it in China.
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You appear to be resident in China, but assuming you are a UK national, you are still entitled to UK tax allowances. have these been applied to your pension? If not, you need to contact your tax office.
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I am assuming that you are over 65. You are entitled to around £9000 pa before you begin to pay tax.
If your pensions combined exceed £9000. Unfortunately you are liable for tax even if you lived on the planet Mars.
In a word yes. All UK sourced income is taxed in the UK, even when non resident.
But, there may be relief under the UK/China Double Taxation Agreement. There is relief available for pension income but it is limited. If you have a Government Service or Local Authority employment pension then it will remin liable to UK tax as you would need to be a National and Resident of China. But, if you have a private pension which is not the State pension or a purchased annuity, there is full relief and can be made exempt.
The claim form is on the HMRC website; http://www.hmrc.gov.uk/cnr/dtindividual....
In the meantime, give your UK office a call and make sure they have you on the correct tax code. If you are over 65, you will be entitled to the age related allowance of 9030 instead of the basic 6035.
Helen H is incorrect - even if you had it paid directly into a Chinese bank it would still be taxed at source unless it was exempted.
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