Calis Beach and Fethiye Turkey Discussion Forum
Property For Sale in Calis Beach & Turkey => Moving To Turkey => Topic started by: hamilton on September 11, 2007, 20:27:31 PM
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We are both about to move to Turkey, both will receive state UK pensions, and both will also receive private pensions, earnt in the UK. Am I correct in saying that the State pension is subject to UK tax, and the private pension is subject to the Tax of the country you are living in. If so how does the system work? what % of Tax do you pay in Turkey. Or am I completely wrong and both the pension are subject to UK Tax?
Tony & Jean
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Hi Jean and Tony - good luck with your move. I can answer part of this for you, so perhaps someone else can pick up the rest of the question....
Good news is that there is a Double Tax Treaty between UK and Turkey. Article 18 of this treaty exempts both state and other pensions arising in the UK to UK non-residents, taxing them only in Turkey. I can send you a copy of the treaty if you need, but you should be able to pick this up of the web somewhere. How much tax would be applied in Turkey I'm afraid I can't answer, so over to someone else........??
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quote:
Originally posted by pookie
Hi Jean and Tony - good luck with your move. I can answer part of this for you, so perhaps someone else can pick up the rest of the question....
Good news is that there is a Double Tax Treaty between UK and Turkey. Article 18 of this treaty exempts both state and other pensions arising in the UK to UK non-residents, taxing them only in Turkey. I can send you a copy of the treaty if you need, but you should be able to pick this up of the web somewhere. How much tax would be applied in Turkey I'm afraid I can't answer, so over to someone else........??
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You should find that the state pension part of your income is tax free in Turkey and the private pension part is taxed as earned income ( earned income is taxed at a slightly lesser rate than unearned income).Good luck with your retirement plans hope to be following you soon.
peter16
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Thanks for the info peter & pookie.
tony & Jean
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If you have a local government pension in the UK it's taxed at source. Wherever you are. If you have a private pension you can choose between being taxed in Turkey or taxed in the UK. Double taxation prevents you being taxed more than you would at the highest rate in either country. If you have a retirement visa in Turkey then I think you won't be taxed at all. I stand to be corrected on this.
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i would like to hear from anyone who has actually opted for paying tax in turkey , how they did it and got on ,if anyone has!
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Thanks vexaar for your info. I did not realise that there was any such thing as a retirement Visa. What is the protocol/age/procedure/term/cost etc for obtaining one? Is there any advantage/disadvantage compared to a residents visa? Do you have to have a retirement visa once you reach a certain age, or is it a personnel choice.
Thanks again Tony
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http://www.gib.gov.tr/index.php?id=466
This is the home page of the Turkish tax authorities (in English)
http://www.turkisheconomy.org.uk/index.html
This is the home page of the First Economic Counsellor at the Turkish Embassy in London.
If you apply for a residence permit and show your retirement papers you will then get residency showing you to be retired. The one advantage that I can see is that you can bring a car into Turkey and keep it here indefinitely. I'm not sure about the tax position. I'm certain I saw somewhere that foreign pensions aren't taxed but I'm not sure and it doesn't apply to me. When I did once try to work it out I calculated that I would be taxed slightly more under Turkish tax than English tax.
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Has any one ever found out about your state pension not being taxed in UK and being taxed in Turkey yet as I have had a letter from UK.
They are asking me to find out in Turkey to tax me then I would be exempt in UK.:D
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Filled the forms in about 9 months ago to have my private pension taxed in Turkey (0% so told) Duly sent off to Ankara together with all the support paperwork duly notarised etc
About 27th of every month since have had an email from Ankara asking for another piece of paper, more information, or can I resend a form but this time please have it notarised.
I have come to the conclusion that the guy only looks at my file once a month and decides how much more hassle he can give me!!!
THEN, 27th February came and went and no email from Ankara asking for a copy of my mother's maiden aunt's notarised birth certificate!!!
Better phone Ankara I thought - maybe this guy can now put the one signature and stamp on the form, HMIR will give me a nice tax rebate and and can offload this and swell the coffers of the local economy.
NAAAAH, 'Sorry Kaptin Bay we are changing the tax system in Turkey and everything is on hold until that is sorted out - maybe one year maybe more!!!'
Does anyone agree that everyday things just get a leeetle more difficult
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right, i have sucesfully done this now.
as a uk citizen recieving a pension and residing in turkey you can opt out of the uk tax system. under the dual taxion treaty with turkey.... you apply to the uk tax centre for non-residents and get the forms from them. the difficult part as mentioned above is getting the tax office to sign the forms. .
made easy for me with the help of my mrs who is a notary translator.
the rest is quite straightforward.
the good news is that pensions are zero taxed in turkey.
anyone needing help with the process email me and i will put you in touch with my wife.
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Hi,If you choose to live in Turkey as a retired person,due to the double taxation treaty,you do not pay tax in the UK on normal or private pensions. You heve to get the paperwork from the UK first.Then you visit theMaliye (tax office in fethiye)and get them to sign a form to confirm you are here and will pay any taxes requiredThere is no retirement visa(residency) as such just a normal residency visa if you choose to get one.(it is still ok to use 3 month visitor visa but complicates various items you may want to buy like houses telephones etc.Assuming you do not work here the only tax you pay is deducted from your bank interest.By arranging with uk pensions you have them paid into a bank of your choice,ie here in turkey.The paperwork is a pain and can take about three months to fully complete.With respect to Vexaar,you cannot!bring a car into turkey indefinitely!There is a scheme to do this if you are retired ie over 65.Its loosely called the blue plate scheme,its operated by the turkish motor club on behalf of the goverment.But you have to deposit a sum of money to the goverment whilst on the scheme it is returned to you when the vehicle is taken out.(hopefully)Hope this helps,its a bit brief but cant go on to much.good luck
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Useful UK site regarding pensions being paid abroad. Also an extract from the site regarding Government and Local Government pensions.
http://www.hmrc.gov.uk/pensioners/paying-abroad.htm
quote:
‘Government' pensions (pensions paid to former Government employees)
It is normally the case that a pension that is paid by the Government of a territory to one of its former employees will continue to be taxed by that Government. Some double taxation treaties provide also that pensions which are paid to former employees of local authorities will continue to be taxable in the country that is making the payments. However, that is not always what has been agreed in a particular double taxation treaty. For that reason it is important to check the text of the relevant treaty.
Turkey does not have an agreement in their treaty in respect of these pensions. Therefore the pensions are taxed at source in the UK.
(I would be happy if someone could prove different)
Baz 8)
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also watch out if you are "living" in turkey but have an address for the likes of nhs treatment in the uk, as these uk government bodies will one day speak the same launguage and you maybe refused treatment
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Government bodies speaking the same language? my pension will be run out by then.
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LoL
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Baz. If you go to Revenue and Customs site and then click on DT Digest it gives you a list of Countries with double taxation agreement. Click on Turkey and scroll across to Pensions. It states that if you are resident in Turkey and are a national then you are exempt from Tax.Therefore,I suggest you apply for Turkish nationality and you should then be tax exempt. Simple eh?.!!!!
WW
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Yes Alan, and I still need another 4 Years residency before I can apply. ;)
Baz 8)
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Government departments do speak the same language......It is called GOBBLEDEGOOK:D
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start again just wrote a whole speal and lost it some how!!grrrr...
right..in the site www.hmrc.gov.uk under the dt.digest full tax relief is given in turkey uder the dt agtreement to- government pensions (pensions paid to ex gov.employees) state pensions(oap) and private pensions.
to qualify for this you need to claim for non resident statis. this requires that you fill in forms stating that you are out of the country the majority of the time and visit uk no more than the stated ammount of days.etc.
also that you are a resident of turkey and a potential tax payer
(full citizeship is not nessesary) getting the turkish tax side of things sorted is the dificult part and where my wife can help.
once the forms are completed and returned to the nottingham centre for non residents. it takes about six weeks to process there.
you also get backdated tax with interest paid for the ammount of previous years you have resided in turkyie.
a couple of year ago i asked on this forum if anyone had actually applied for this and there was no reply up till now. recently i met a retired uk tax inspector who had sucessfully achieved this and inspired me to go for it.
.
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Stuart,
I have read through the DT Treaty for Turkey dated November 2008, page 25, under the Government pension heading it does state "Full relief (N&R)" if you read the table on page 4, it reads,
quote:
(N & R)
Relief is only available if the individual is
... a national and
... a resident of the other territory.
Could you please find me the section that overules this.
The form stated for informing HM Revenue & Customs of leaving the country, I sent off and had aknowledged last year.
The link below is for the claim form and even that has the statement quoted below, admittedly it does state "many treaties" not all, but the Turkish treaty does have the N&R clause.
quote:
http://www.hmrc.gov.uk/cnr/dtindividual.pdf
quote:
‘Government' pensions
Many, but not all, treaties have special rules that apply if the pension is paid for service to the UK government or a local
authority. Under many treaties the UK will retain primary taxing rights over a 'government' pension.
If there is a way for me to reclaim the tax I have paid I really would like to know, but every way I have tried I hit the same wall.
Baz 8)
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We have been living here permently for 18 months.Before moving here we got in touch with the tax office in the UK told them we were moving to Turkey permently and asked would we still be liable for tax in the UK,they said yes .We gave them our address in Turkey.This week we have just recieved our new tax code for next year.(sent to Turkey)!
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baz if you look in the next column it states full relief for state and private pensions,(no N&R) government pensions applies to ex forces civil servents etc.
they dont make it easy to understand!!
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Does "government pensions" apply to fire fighters who's pensions are paid through local aurthorities?
Fi
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good question Fi....i dont know!! probably not.. you could phone the centre for nonresidents and ask them,they are quite helpful.
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I found the state pension with full relief, but I am ex Civil Servant with a Government Pension.
Baz 8)
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fi..your question has been bugging me so i think i found your answer...
fire brigade pensions-paid directly by local authority are classed as government.
pensions paid by a fire authority under the (fire fighters pension scheme) are non- government.
hope this makes sense to you.!
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Baz for turkey it said n+r
N relief is available wherever a national of the territory is resident
R relief is available to residents only
then it said note 3+4
3 includes state and trivial commutation lump sum
4 relife for incapacity benefit avalable under pension article
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Graham here's the link, checkout page 25 (Turkey), column with the red 19 (Government Pensions) and then page 4 for the explanation. It quite clearly states N&R.
http://www.hmrc.gov.uk/cnr/dtdigest.pdf
Baz 8)
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Ok take a look at this link this may help. ahttp://www.merhabaforums.com/money-affairs-f41/tax-pensions-paid-turkish-residents-t5689.html
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Yes that confirms what I have been saying about Government Pensions, i.e. civil service/military pensions are taxed at source.
Baz 8)
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Stuart,
Understand from your last post,that your research shows that Fire service pensions, even though classified as local authority(government pensions), are non government?
Can I ask where you found that info so we can use it if we decide to make a claim.
Cheers
Fi
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hi fi ! was trying to explain that there appears to be two types of fire brigrade pensions. one governmnet and one not.
go to www.hmrc.gov.uk
in the search box type - intm343040
click on - dt claims and applications...types of income and annuities.
it gives a list there including fire brigade.
if you cant find it get beck to me and i will try and find an easier way of getting there.
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baz i unserstand what you are saying now and your right... however are you not entitled to a state pension also, when eligable and if so able to get tax relief on it?
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A few years yet till I am eligible for the state pension Stuart, I'm still only a youngster really and yes that one can be tax free under the DT Treaty.
Baz 8)
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Thanks Stuart great help.
It seems even though Erics pension is classed as non government..yippee.. Turkey is one of the countries that excluded :(
Only option is to become a national at a later date.
Many thanks
Fi
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Hi guys,
Has anyone actually done this tax thing successfully yet or still waiting. :D
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i have actually done it now and am one very happy chappy... if you mail me your contact details and i will get in touch with the relavent info.