Tax question

[EmilyA]

Does anyone else have a pension from the (former) British Steel Corporation? OH has been told by the UK tax authorities that this pension must be taxed in the UK. Is it right that the BSC is considered in the same category as a Government pension?

Thanks

Em

[dragonrouge]

Coming from South Wales we obviously had Port Talbot Llanwern and many others. Were they nationalised at one stage? Later they passed into private hands such as Corus. If indeed a pension is being derived from HMG then the tax guys may be correct.

Cannot remember for the life of me the scenario as to nationalisation or the dates.

Sorry

[parsnips]

[quote user="EmilyA"]

Does anyone else have a pension from the (former) British Steel Corporation? OH has been told by the UK tax authorities that this pension must be taxed in the UK. Is it right that the BSC is considered in the same category as a Government pension?

Thanks

Em

[/quote]

Hi,

      The only way to get a definitive answer on this is to contact HMRC, and get their reply in writing by emailing them. If you have to make your french declaration before you get an answer ,I would declare it as a government pension, taxable only in the UK, at page 4 sec VII on form 2047, and (net of UK tax) at box TI on form 2042.

[EmilyA]

Thanks both. The pension does come from the British Steel Pension Fund and not directly from HMG and it is Corus who own the assets. It works out to our advantage to have it taxed in the UK because of the personal tax allowance, but it seemed odd as I had never heard that nationalised industries came into that category. Will do as you suggest and get email confirmation.

[cooperlola]

My railway pension (also now managed independently) is taxable in France - it is in no way a government pension.  My gut feeling suggests that therefore a British Steel pension would alsobe taxable in France.  I'd be amazed if that made you worse off due mainly to the fact that your joint income is divided in half before each person's allowances are applied so to my mind few couples are worse off as a result.  Cotisations (healthcare contributions etc) are payable on your whole income regardless of where taxed so that wouldn't make a difference either.

[EmilyA]

We thought it should be in France too, but both the local office (Scotland somewhere?) and Nottingham said it should be taxed in the UK and sent us the coding notice. We would still happily pay it in France, even though it might just push us over a tax threshold. Health cover not the issue as we pay that through our micro-entreprise.

[Will]

This might help: http://www.hmrc.gov.uk/cnr/faqs_general.htm#8nr

It is clear from the above that HMRC treats all income for non-residents arising in the UK as being subject to UK tax. The exception is where a double taxation agreement exists that determines whether relief is available on non-governmental occupational pensions (which are taxable in the country of residence). There is such an agreement between UK and France. Unfortunately, with all due respects, the level of knowledge of most HMRC staff is no longer particularly high (Mrs Will was a trainer for the Revenue in her former life).

So you will need to bring this fact to their attention. Refer them to http://www.hmrc.gov.uk/international/france.pdf (though even that needs reading very carefully several times to decide how pensions are dealt with).

[EmilyA]

Thanks Will - the info in the second link takes a bit of working out! This is our fourth French tax return and OH has always declared both his pensions in France before (the second one is from a private company.) It was when he was trying to get the UK tax taken off the British Steel one under the double taxation arrangements that the problem arose. We thought it likely that the first tax office had got it wrong, but when it was confirmed by Nottingham we started to have our doubts.....