Question: I am emigrating to the Philippines later this year. Can I pay my tax on my pensions in my new country, or do I still have to pay my taxes here? The state pension and private pensions I get are from the UK. Thank you in advance.
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Tax is part of this equation, but there are other considerations too. The below should hopefully help you navigate the situation regarding your pensions, but I’d strongly recommend taking independent financial advice to make sure you are on top of any complexities that arise.
You can usually access up to 25 per cent of your private pension tax-free, with the remaining withdrawals subject to income tax.
If you are an overseas resident with UK pensions in a country which doesn’t have a “double tax treaty”, you may be taxed by both the UK and the country where you live.
Provided you have enough National Insurance contributions to qualify for the state pension, if you move abroad you can continue to receive the benefit. You can choose to have your state pension paid into a UK bank or a bank in the country you are living in.
The state pension will only increase each year if you retire to a country in the European Economic Area, Gibraltar, Switzerland or countries that have a social security agreement with the UK. As the UK and the Philippines have a double tax treaty, you should continue to receive state pension increases in line with UK Government policy.
Private pension considerations
Some schemes may also charge you extra to pay your pension into an overseas account and your income could be paid in pounds sterling, exposing you to currency fluctuations.
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