|
Finances / Finanzen » uk.finance » Help Please! Long Absence From UK - Tax/Pension Considerations...
| Help Please! Long Absence From UK - Tax/Pension Considerations... [message #373884] |
Fr, 24 März 2006 13:26 |
|
Hi,
My wife and I are planning to go travelling abroad for maybe up to 4
years or so, partly funded from sale of our house and also from a
compensation claim. Long term plan is to possibly move to Oz, but we
would probably end up living back in UK for about a year before this.
During these 4 years away, we would return here every few months to
visit relatives and would probably do some occasional work.
Are there any considerations to bear in mind with regards to not paying
income tax/national insurance for this time (apart from the occasional
work and tax on savings)? How would this affect our state pensions long
term (were we to stay in the UK)? We've got occupational pensions which
will be frozen.
Thanks for any help.....
Terry.
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #373927 ] |
Sa, 25 März 2006 05:29 |
|
On 24 Mar 2006 04:26:03 -0800, "terzal" <tdhew [at] aol.com> wrote:
>Hi,
>
>My wife and I are planning to go travelling abroad for maybe up to 4
>years or so, partly funded from sale of our house and also from a
>compensation claim. Long term plan is to possibly move to Oz, but we
>would probably end up living back in UK for about a year before this.
>During these 4 years away, we would return here every few months to
>visit relatives and would probably do some occasional work.
>
>Are there any considerations to bear in mind with regards to not paying
>income tax/national insurance for this time (apart from the occasional
>work and tax on savings)? How would this affect our state pensions long
>term (were we to stay in the UK)? We've got occupational pensions which
>will be frozen.
>
>Thanks for any help.....
To be considered non-resident for tax purposes you have to intend to
stay out of the UK for at least one full tax year. After that, you
cannot return to the UK for more than an average of 90 days a year, or
182 days in any single year if you want to retain that status.
You don't have to pay UK NI contributions while you are away, but its
a good idea to continue paying at the Class 3 rate of £7.55 a week in
order to eventually qualify for your full state pension.
Chris
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #373939 ] |
Sa, 25 März 2006 12:03 |
|
"Chris Blunt" <chris_blunt [at] spamfence.net> wrote in message
news:geh9229lel9vbs6kogqd7p4fidp60es23t [at] 4ax.com...
> On 24 Mar 2006 04:26:03 -0800, "terzal" <tdhew [at] aol.com> wrote:
>
>>Hi,
>>
>>My wife and I are planning to go travelling abroad for maybe up to 4
>>years or so, partly funded from sale of our house and also from a
>>compensation claim. Long term plan is to possibly move to Oz, but we
>>would probably end up living back in UK for about a year before this.
>>During these 4 years away, we would return here every few months to
>>visit relatives and would probably do some occasional work.
>>
>>Are there any considerations to bear in mind with regards to not paying
>>income tax/national insurance for this time (apart from the occasional
>>work and tax on savings)? How would this affect our state pensions long
>>term (were we to stay in the UK)? We've got occupational pensions which
>>will be frozen.
>>
>>Thanks for any help.....
You can legitimately move your savings off shore and not
suffer the UK deduction at source on this income. But.....
> To be considered non-resident for tax purposes you have to intend to
> stay out of the UK for at least one full tax year. After that, you
> cannot return to the UK for more than an average of 90 days a year, or
> 182 days in any single year if you want to retain that status.
....As someone who is UK resident before this period starts it
is more complicated than this. Technically one should satisfy
the requirement to move 'permamently' before this calculation
is done The OP is entitled to return to the UK for a holiday
during an extended period away, but if he returns to 'work' the
IR will not allow the move to be called permanent and will be
able to treat each period away spararately and none of them
will qualify. Whether they notice that they can/should do this,
is going to be down to luck.
This doesn't actually have any effect on the earnings during the
period in the UK, as these will be taxable anyway. But it will
affect the taxation status of the offshore funds I suggest above.
> You don't have to pay UK NI contributions while you are away, but its
> a good idea to continue paying at the Class 3 rate of £7.55 a week in
> order to eventually qualify for your full state pension.
Agreed. Though you can miss IIRC 4 years of contributions
and the last 5 years will be automatically credited, so you need
to get a statement of entitlement from the DHSS to see if it is
actually necessary to contribute every year.
tim
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #373955 ] |
Sa, 25 März 2006 16:38 |
|
On Sat, 25 Mar 2006 12:29:04 +0800, Chris Blunt
<chris_blunt [at] spamfence.net> wrote:
>You don't have to pay UK NI contributions while you are away, but its
>a good idea to continue paying at the Class 3 rate of £7.55 a week in
>order to eventually qualify for your full state pension.
You reckon that's a good bet? 400 quid a year now on the chance that
the rules don't change? and even if they don't change you'll probably
end up with benefits equivalent to the pension you would've got?
Jim.
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #373963 ] |
Sa, 25 März 2006 18:53 |
|
"Jim Ley" <jim [at] jibbering.com> wrote in message
news:44256394.47292312 [at] news.individual.net...
> On Sat, 25 Mar 2006 12:29:04 +0800, Chris Blunt
> <chris_blunt [at] spamfence.net> wrote:
>
>>You don't have to pay UK NI contributions while you are away, but its
>>a good idea to continue paying at the Class 3 rate of £7.55 a week in
>>order to eventually qualify for your full state pension.
>
> You reckon that's a good bet? 400 quid a year now on the chance that
> the rules don't change? and even if they don't change you'll probably
> end up with benefits equivalent to the pension you would've got?
Not if you've moved to Oz you wont :-(
tim
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #373965 ] |
Sa, 25 März 2006 19:09 |
|
On Sat, 25 Mar 2006 18:53:28 +0100, "tim \(in sweden\)"
<tim_in_sweden2005 [at] yahoo.co.uk> wrote:
>
>"Jim Ley" <jim [at] jibbering.com> wrote in message
>news:44256394.47292312 [at] news.individual.net...
>> On Sat, 25 Mar 2006 12:29:04 +0800, Chris Blunt
>> <chris_blunt [at] spamfence.net> wrote:
>>
>>>You don't have to pay UK NI contributions while you are away, but its
>>>a good idea to continue paying at the Class 3 rate of £7.55 a week in
>>>order to eventually qualify for your full state pension.
>>
>> You reckon that's a good bet? 400 quid a year now on the chance that
>> the rules don't change? and even if they don't change you'll probably
>> end up with benefits equivalent to the pension you would've got?
>
>Not if you've moved to Oz you wont :-(
It's possibly an even worse bet if they move to something like "flat
rate pension for all residents" - a much more logical and equitable
pension provision, as it doesn't penalise those unable to work and is
of course cheap to administer.
Jim.
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #373990 ] |
So, 26 März 2006 06:50 |
|
On Sat, 25 Mar 2006 15:38:32 GMT, jim [at] jibbering.com (Jim Ley) wrote:
>On Sat, 25 Mar 2006 12:29:04 +0800, Chris Blunt
><chris_blunt [at] spamfence.net> wrote:
>
>>You don't have to pay UK NI contributions while you are away, but its
>>a good idea to continue paying at the Class 3 rate of £7.55 a week in
>>order to eventually qualify for your full state pension.
>
>You reckon that's a good bet? 400 quid a year now on the chance that
>the rules don't change? and even if they don't change you'll probably
>end up with benefits equivalent to the pension you would've got?
Whether its a good bet or not depends on how long you expect to live
after retirement age, but a man who is 65 today can expect to live
until he's 83 years old.
Based on today's figures, after 44 years of NI contributions you would
have put a total of about £17,300 into the system. Upon retirement you
start taking out of the system at a rate of £4,300 a year, so you get
you money back by the time you reach age 69. You can tweak those
figures a bit to take into account things like accumulated loss of
interest on your contributions, but if you then live for a further 14
years it seems to be a fairly good deal.
Its true the rules may change in future, but they would probably be
phased in in such a way so as not to have a major impact on those
already in the system.
Chris
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #373992 ] |
So, 26 März 2006 07:04 |
|
On Sun, 26 Mar 2006 12:50:24 +0800, Chris Blunt
<chris_blunt [at] spamfence.net> wrote:
>On Sat, 25 Mar 2006 15:38:32 GMT, jim [at] jibbering.com (Jim Ley) wrote:
>Its true the rules may change in future, but they would probably be
>phased in in such a way so as not to have a major impact on those
>already in the system.
So you're suggesting that a new non-contributions based system would
exclude people who hadn't made contributions? that seems unlikely.
Jim.
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #373995 ] |
So, 26 März 2006 07:59 |
|
On Sun, 26 Mar 2006 05:04:32 GMT, jim [at] jibbering.com (Jim Ley) wrote:
>On Sun, 26 Mar 2006 12:50:24 +0800, Chris Blunt
><chris_blunt [at] spamfence.net> wrote:
>
>>On Sat, 25 Mar 2006 15:38:32 GMT, jim [at] jibbering.com (Jim Ley) wrote:
>
>>Its true the rules may change in future, but they would probably be
>>phased in in such a way so as not to have a major impact on those
>>already in the system.
>
>So you're suggesting that a new non-contributions based system would
>exclude people who hadn't made contributions? that seems unlikely.
I'm not making any predictions on what specific changes might be made.
However, I do think it likely that whatever is done will be introduced
in a way that causes the least financial impact to those approaching
retirement age who have already made a lifetime of contributions.
Chris
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #374010 ] |
So, 26 März 2006 13:58 |
|
Thanks for the replies....
As things stand at the moment then, if we didn't make the voluntary NI
contributions while we were away, for say 4 years, then stayed in the
UK until we retired, can those years be bought back at a later date, or
if not, how much difference is this likely to make to our pensions?
We're currently in our early 30s, if that makes any difference.
I'm gonna speak to the tax office before we go, and I'm sure they will
tell me all this, but it is helpful to have a bit of knowledge
beforehand, and I don't know anything about taxes and pensions!
Terry.
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #374011 ] |
So, 26 März 2006 14:10 |
|
On Sun, 26 Mar 2006 13:59:43 +0800, Chris Blunt
<chris_blunt [at] spamfence.net> wrote:
>On Sun, 26 Mar 2006 05:04:32 GMT, jim [at] jibbering.com (Jim Ley) wrote:
>
>>So you're suggesting that a new non-contributions based system would
>>exclude people who hadn't made contributions? that seems unlikely.
>
>I'm not making any predictions on what specific changes might be made.
>However, I do think it likely that whatever is done will be introduced
>in a way that causes the least financial impact to those approaching
>retirement age who have already made a lifetime of contributions.
Oh certainly a low financial impact to those approaching retirement
age - but the advice could've been being given to a 30yr old, the
advice wasn't qualified by age.
Jim.
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #374016 ] |
So, 26 März 2006 14:38 |
|
"terzal" <tdhew [at] aol.com> wrote in message
news:1143370703.014330.140090 [at] u72g2000cwu.googlegroups.com...
>
> Thanks for the replies....
>
> As things stand at the moment then, if we didn't make the voluntary NI
> contributions while we were away, for say 4 years, then stayed in the
> UK until we retired, can those years be bought back at a later date,
Up to five years I believe.
> or
> if not, how much difference is this likely to make to our pensions?
> We're currently in our early 30s, if that makes any difference.
Ah, are you thinking of moving to Oz permanently?
tim
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #374019 ] |
So, 26 März 2006 15:27 |
|
Hi,
Bit of a long story....
Was planning to move to oz, permanently. Wife broke her neck in car
accident and was off work for nearly three years. Thats put life in
perspective a bit and had been catalyst in us selling up and jacking
our jobs in to spend hopefully a few years travelling and seeing the
world.
The long term plan still is to move to Australia, possibly permanently.
We would be getting visa to live there on the basis of her
qualifications (as a nurse) and some of her family there. Being
slightly pessimistic, there is always the possibility that her injury
which has left some permanent nerve damage might prove a problem in
getting a visa. So, we might end up stuck here. If we went to Oz, plan
is to comit to being there at least long enough to get citizenship, so
that then we could come and go as we wish, even maybe move back here
for a while but then retire over there.
Although ideally, we'd rather go travelling for a while, then move
there for good, we're flexible and don't see it as a lifetime change
for ever. maybe we'll even end up living somewhere else for a few years
as well....
|
|
|
| Re: Help Please! Long Absence From UK - Tax/Pension Considerations... [message #374022 ] |
So, 26 März 2006 16:10 |
|
"terzal" <tdhew [at] aol.com> wrote in message
news:1143379663.226723.262230 [at] v46g2000cwv.googlegroups.com...
> Hi,
>
> Bit of a long story....
>
> Was planning to move to oz, permanently. Wife broke her neck in car
> accident and was off work for nearly three years. Thats put life in
> perspective a bit and had been catalyst in us selling up and jacking
> our jobs in to spend hopefully a few years travelling and seeing the
> world.
>
> The long term plan still is to move to Australia, possibly permanently.
> We would be getting visa to live there on the basis of her
> qualifications (as a nurse) and some of her family there. Being
> slightly pessimistic, there is always the possibility that her injury
> which has left some permanent nerve damage might prove a problem in
> getting a visa. So, we might end up stuck here. If we went to Oz, plan
> is to comit to being there at least long enough to get citizenship, so
> that then we could come and go as we wish, even maybe move back here
> for a while but then retire over there.
>
> Although ideally, we'd rather go travelling for a while, then move
> there for good, we're flexible and don't see it as a lifetime change
> for ever. maybe we'll even end up living somewhere else for a few years
> as well....
So the problem is you going to leave 15 years of pension in the
UK and have 25 years somewhere else.
You need to find out what your long-term options are, before deciding
whether to continue funding the UK pension short term.
Sorry don't know the answer to this question
tim
>
|
|
|
Gehe zu:
aktuelle Zeit: Do Feb 9 01:44:07 CET 2012
Insgesamt benötigte Zeit, um die Seite zu erzeugen: 0,06619 Sekunden |
