Reply to: Working in Qatar - tax liability

[ASB]

ASB, if you don't have 35 years contributions then I'm sure you'll get a reduced pro-rata rate of the flat rate pension.

That's what I would expect. The white paper does talk about transitionary arrangements regarding previous NI record but I wouldn't be too optimistic.

It seems fairly harsh; but that's the way it goes.

[Fred Bloggs]

ASB, if you don't have 35 years contributions then I'm sure you'll get a reduced pro-rata rate of the flat rate pension.

[ASB]

Presently, 30 years. When the flat rate pension is introduced in a couple of years from now, that is increasing to 35 years.

Fred,

That got me to thinking and looking around to try and find an answer to a somewhat different question.

According to my state pension forecast I already have enough years for a full pension.

And a load a serps (s2p) - one benefit of paying loads and loads and loads of NI as a reasonably well paid permie for a few years.

Now along comes the flat rate pension. So they nick the serps

My hypothetical question comes round to transitionary arrangements.

If I decide to bum around between now and receipt of state pension I will have 30 years, but not 35. I'm actively considering this and just living off my capital (tesco value beans on tesco value white bread).

Question is whether I will still get the full pension on given it will have changed for a requirement of 35 years not the 30.

I expect I can guess the answer, but it's rubbing salt in the wounds after they have basically stolen all my s2p - which they told me a few years ago was worth 70k (and also was part of "my share" in divorce).

Not a great deal. The new arrangements are supposed to benefit 90 odd percent. I guess I'm in the 10 per cent and I get really stiffed I reckon.

[Fred Bloggs]

Whilst digressing, still, interesting comment. How long does one need to be paying NI to qualify for State Pension?

Presently, 30 years. When the flat rate pension is introduced in a couple of years from now, that is increasing to 35 years.

[ahoff]

Although the rate of return from voluntary NI contributions is quite high it may be questionable for quite a lot whether it's worth it. With the reduction of years needed to 30 for some it may be much less important; i.e. will still gain a full pension anyway and the benefit from the voluntary contributions will be zero.

As an old fogey I already have enough years and wouldn't waste the money. Other circumstances will be different of course.

Whilst digressing, still, interesting comment. How long does one need to be paying NI to qualify for State Pension?

[jamesbrown]

Although the rate of return from voluntary NI contributions is quite high it may be questionable for quite a lot whether it's worth it. With the reduction of years needed to 30 for some it may be much less important; i.e. will still gain a full pension anyway and the benefit from the voluntary contributions will be zero.

As an old fogey I already have enough years and wouldn't waste the money. Other circumstances will be different of course.

More generally, it's also worth checking whether there's a reciprocal agreement in place for social security benefits (such as the totalization agreement with the US). For example, when you return to the UK and approach retirement, the years spent in an agreement country should count towards the UK requirement for years contributed.

Social security insurance, benefits and healthcare rights in the European Economic Area and Social security agreements between the United Kingdom (UK) and other countries - DWP

[ASB]

I don't see why not. If you are intending to come back to the UK you may wish to continue paying voluntary NI contributions

Although the rate of return from voluntary NI contributions is quite high it may be questionable for quite a lot whether it's worth it. With the reduction of years needed to 30 for some it may be much less important; i.e. will still gain a full pension anyway and the benefit from the voluntary contributions will be zero.

As an old fogey I already have enough years and wouldn't waste the money. Other circumstances will be different of course.

[LisaContractorUmbrella]

Hi Lisa

It appears I meet the First and Third automatic overseas test as I will be spending < 16 days in the UK, no work is done in the UK and also I won't be travelling to the UK much. This appears sufficient. Hesitant about me having the properties though. Did not submit the P85 and wondering if I can do so retrospectively.

I don't see why not. If you are intending to come back to the UK you may wish to continue paying voluntary NI contributions

[The Spartan]

You are indeed correct I did purely so it was recorded that I did in fact leave the UK

Sent from my XT890 using Tapatalk 4

[jamesbrown]

Was that this year or in previous years? E.g. is there still a change HMC will come back and say: this is no good Mr Spartan.

Also noticed that as a landlord, i need to adhere to: HM Revenue & Customs: The Non-resident Landlord Scheme

As far as I'm aware, there is no legal requirement to submit a P85. I'm not saying you shouldn't do it.

[CloudWalker]

At least your not working in Egypt.. they are now in a state of emergency

[ahoff]

I submitted mine after I left as I didn't know about it till someone mentioned it to me

Sent from my XT890 using Tapatalk 4

Was that this year or in previous years? E.g. is there still a change HMC will come back and say: this is no good Mr Spartan.

Also noticed that as a landlord, i need to adhere to: HM Revenue & Customs: The Non-resident Landlord Scheme

[The Spartan]

I submitted mine after I left as I didn't know about it till someone mentioned it to me

Sent from my XT890 using Tapatalk 4

[ahoff]

Automatic overseas test

Yes. I understand that you would need to be out of the UK for more than a financial year and you would have to de-register from UK tax before becoming tax resident in Qatar HM Revenue & Customs: Income Tax when leaving the UK

Hi Lisa

It appears I meet the First and Third automatic overseas test as I will be spending < 16 days in the UK, no work is done in the UK and also I won't be travelling to the UK much. This appears sufficient. Hesitant about me having the properties though. Did not submit the P85 and wondering if I can do so retrospectively.

[The Spartan]

Thanks very much both - so the key is to de-register from tax.

The issue as I still struggl with is that I'm still resident in the UK and have a property, and also my LTD is (whilst not active), still current. I'm away for the entire tax year so that's not an issue.

You should have submitted a P85 on leaving the UK, check out the following: http://www.hmrc.gov.uk/international/rdr3.pdf it's actually one of the better documents HMRC have written if there is such a thing, you might want to look at the sufficient ties section as well.