Restriction of personal tax allowance

I refer to the above. On examining fully the U.K. Government Consultation document (see first link below)relating to U.K. Ex Pat Pensioners with a number of proposals which could be made law in the next budget.



This relates to Ex.Pats, being resident in another country and suggests that those who are in receipt of Government style pensions, including those retired from the Health Service, Fire Service, Police Service, Education, Central and Local Government, Prison Service and possibly the Military Service, would still retain their Personal Allowance. If such are resident in another country, i.e. Spain, they may be having their State Pension paid into Spain and dealt separately with under the Spanish Tax System



Do you agree that retaining the UK Personal Allowance in respect of the income of non-residents which is by treaty subject exclusively to UK taxation would help mitigate unfair outcomes from a broader policy of restricting non-residents’ entitlement to the UK Personal Allowance?



If so, then you are given the opportunity to send in an e-petition in relation to this. The thought then occurs that if insufficient numbers send in the petition, this might be brought into law in its entirety including the removal of Income Tax Allowances for Ex Pats resident outside the U.K. Could all concerned please complete the e-petition form and send it in as requested? Even if it does not effect you directly, friends or relatives, etc could you also do the same so that the Government receive as large a number of replies as possible? This will help those who have spent their lives working for the U.K. Government in one way or another and a good many of whom are living on dwindling pensions.



The link to the Government Web Site is:-






https://www.gov.uk/government/consultat ... -allowance






The link to the Petition is:-






http://epetitions.direct.gov.uk/petitions/68507






The link to send comments to the U.K. Treasury is:-






nonresidentspersonalallowanceconsultati ... gsi.gov.uk

Whilst it is right to feel concern for this, I would point out Paragraph 6.6 of the government consultation paper
The government does not intend to raise taxes on vulnerable groups or in situations where the UK is the principal taxing authority and an individual has no recourse to relief as a result of the UK having sole taxing rights under a tax treaty. If the government were to restrict non-residents’ entitlement to the Personal Allowance, it would intend this to apply to types of income which are taxable both in the UK and overseas (such as that from immovable property) but to retain the Personal Allowance on income that is taxable exclusively in the UK.

This states that government pensions (armed forces, police, civil service and so on) are already taxed exclusively at source in the UK. Also note that NHS pensions are generally not considered as government pensions and can be paid in UK free of tax and the tax in the overseas country would come into play as it does with the state pension. Only NHS staff paid by a local authority would be classed as a government pension.

If the removal of the allowance were to be removed for this type of pension, the government would be bound to pay the pensions with no tax deducted so the resident living overseas could claim the allowance in the country they are living in but they have no intention of doing that.