Paphos People

My pension income falls short of the taxable limit, but I do have to pay tax on Building Society interest, can anyone think up a way of using the capital to bring in a "pension" which would still not be taxable - Sorry this is a bit vague, I know what I mean - trust me!!!
Any advice would be very welcome.

A few thoughts:

"Building Society" implies the money is in the UK. If you're not a taxpayer you can ask for the interest to be paid gross.

To turn the capital into a pension you need to purchase an annuity. This is a permanent purchase and with the current economic climate may not be the best option.

You could consider putting the capital offshore where you will get better interest and be paid gross. Your own Building Society may have an offshore branch.

You could take the exchange rate hit, bring the capital over here and get better interest.

Pete

In Cyprus you Pension is taxable.
But the Tax rate is either an allownce of 19500 Euros and then 20% after up to a certin limit or a flat rate of 5% of your pensionable income. YOU CHOOSE either way each year which works best for you. When I calculate this for Clients I show them each way and we choose the beat scenario for each year.
Tax is done in advance here we have to do a Self Assesment in JUly for he present year and then he MOP up is done in the following April for the previous year to take care of an unknown changes and to draw a line under he year previous.

If you want register here for tax your agent should ensure you sign the necessary forms to claimback any tax since your residency here can be proved. When I do this I make sure going forward all penions are paid without deduction of UK income tax.
The difficult stage is getting the Uk inland revenue to act before any tax is due in Cyprus. Unfortunatley sometimes there is an overlap. But on the whole the outcome is better all round, going forward.

Please PM me if you have any further questions.

Paphian 4761

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