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British Pensioners in Malta/Gozo

UK pension payment

Many of our members are pensioners, so here's a place to discuss the relevant issues.

UK pension payment

Postby chelica2 » Wed 3 Aug 2005 07:27 GMT

Dear all,

I wanted to inquire about the ways I can receive pension once I retire on the island. I heard I could get the pension paid directly into my local bank account.
Could anyone tell me if there is any charge (payment fee) associated with the convenience of direct transfer and what the exchange rate might be.

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Postby Ros » Wed 3 Aug 2005 15:42 GMT

Hi Chelica 2, just thought Id say hello. As far as I know you are correct that your pension will be paid directly into your account (just inform the uk pension scheme where you want your pension paid into,)but unfortunately I dont know whether there is a fee or not, sorry.
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Postby chelica2 » Wed 3 Aug 2005 15:44 GMT

Thanks, Ros!
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Postby MarkinMalta » Sat 5 Nov 2005 18:12 GMT


I am not sure if this is still a problem for you? If so, I believe there maybe a few different options. However the first question would be are you currently paying tax in the UK on the pension? If so there could be a way of applying for it to be paid to you gross.

Things that will influence this is if it is a Basic State pension, company pension or Personal Pension for example.

Post again if this is still something you are seeking info on.

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UK pension

Postby Coffeecup » Fri 5 Nov 2010 12:15 GMT

Hi Chelica2.....we recieve our UK pension direct into our local bank account and there is no charge.
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Personal Taxation in Malta

Postby Quillan » Wed 8 Dec 2010 19:35 GMT

I have recently received my Residence Document but there seems to be confusion about taxation.
This is what a British International Tax consultant with Offices here says.."Achieving residence in Malta
There are two methods of achieving residence in Malta.

METHOD 1 Registration Certificate
As an EU National, you apply for a Registration Certificate and will pay tax on income arising in Malta, on any overseas income that is remitted to Malta, and on any capital gains arising in Malta. The highest tax rate is 35%.
Income arising overseas is not taxable, provided it is not remitted to Malta. Overseas capital and overseas capital gains are not taxable even if remitted.
You may work in Malta under this method."

That seems quite clear and understandable. Anyone disagree?

Where this could be open to dispute is whether you are Domiciled here or elsewhere. I understand the concepts of Domicile, and you cannot apply for it. You establish it by your habits and it is up to any Tax Authority to try to challenge it if they think they have grounds.
The Tax Consultant I refer to above does not mention Domicile, when quoting the tax rules above.
What you can be taxed on from external financial sources depends largely on where you claim to be Domiciled, as I am led to believe elsewhere.

Also what is not clear is that another well known firm of International Tax people here say that if you are Domiciled here but non-resident, you do not pay tax on any income or Gains which arise outside Malta, provided they are not remitted here.

Therefore it seems to me, that if you have such income or Gains which you do not need for your living costs here, then your best status is Domiciled but non-resident.

But that seems to imply by being non- resident, you must be resident elsewhere and therefore subject to another tax jurisdiction!!

This in turn would contradict the status of Domicile, being the place where you normally live which could well be Malta, and easily provable!!

Help !!
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Postby gozomark » Wed 8 Dec 2010 20:20 GMT

Hi, and welcome to the forum :-)

Changing your domicile if you are a UK citizen is very difficult - I think to even be considered you need to live outside the UK for 17 out of 20 years .

The Method 1 you quote has nothing to do with domicile. As a foreigner, you only pay tax on income generated in, or brought into Malta.
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Postby Quillan » Wed 8 Dec 2010 21:53 GMT

Thank you Gozomaark. Most helpful. Of course I cannot dispute your suggestion that you would have to have been out of the UK for 17 of the last 20 years.
May I quote from the Official HMRC6 Booklet which is current.

4.2 What does domicile mean?
Domicile is a matter of general law; not a tax law. There are many things
which affect your domicile. Some of the main points you should consider if
you are claiming not to be domiciled in the UK are:
• you cannot be without a domicile
• you can only have one domicile at a time
• you are normally domiciled in the country where you have your
permanent home
• your existing domicile will continue until you can acquire a new one
• domicile is distinct from nationality or residence, although both can have
an impact on your domicile
• the fact that you register and vote as an overseas elector is not normally
taken into account when deciding whether or not you are domiciled in
the UK.
Any references we make to being 'domiciled in the UK' are references to
being domiciled in any part of the UK.
4.3 What types of domicile are there?
There are three types of domicile relevant to Income Tax and
Capital Gains Tax. These are:
• domicile of origin
• domicile of choice
• domicile of dependence.

[I have omitted irrelevant text .]

4.3.2 Domicile of choice
You have a legal capacity to acquire a new domicile at the age of 16.
Broadly, to acquire a domicile of choice you must leave your current country
of domicile and settle in another country. You need to provide strong
evidence that you intend to live there permanently or indefinitely. The
following factors will be relevant, though this list is not exhaustive:
• your intentions
• your permanent residence
• your business interests
• your social and family interests
• your ownership of property
• the form of any Will you have made.
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Postby Penury » Thu 17 Feb 2011 00:40 GMT

I hope the following helps - from personal experience

Having lived (resided) outside the UK or over 40 years, I took this point up with HMRC as well as folks that deal with residency, domicile & citizenship

I have dual citizenship, have not lived or stayed in the UK for any period beyond being the usual tourist during that period.

I have paid in the max 30 years worth of class 1, 2 & 3 NIC & therefore shall qualify for a full state pension when I reach 65 soon.

The UK law states (what I was told) that because my father was born in the UK, as was I, that I shall always be domicile UK.

I could I was told if allowed, after the age of 16 to apply & give a very strong convincing reason why I should not be domicile.

This answer lead me to believe that I was owned by the crown & that I was giving up my birthright ... could this be treason or me simply giving up my British citizenship?

The main thing to consider in all of this to my way of thinking is residency (the taxman loves this one) & they talk about the 183 day rule within a tax year. If you are out 183 continuous days - you are classified as non-resident for tax purposes & that any earned interest from investments including pensions could have witholding tax applied to them before you receive the money

I was also told - that there are hidden bits (rules) buried deep between the lines that state you can fly in, out back & forth and as long as you can show that within an 3 year period you spent 90 days in the UK you are considered resident

UK state pensions continue to be paid in full while living in Malta as would any indexing if you lived within the EU. Those in receipt of UK pensions that live in countries such as OZ, NZ, SA & Canada would not get their pensions indexed.

So, for us at 65 we take back up residency in the UK, pop back & forth between Canada & other places - one which could even be Malta
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