Tax on UK pensions

edited December 1969 in General
My grandfather is being taxed in Madeira on his UK pension that he has already paid tax on in the UK. As he is 94 my grandmother has been trying to sort it out and getting nowhere with the Madeiran authorities. They have employed a company called Finesco who are useless and not responding to any phone calls and I wondered if anyone could shed any light on whether this is normal? They are currently being fined £500 a month and have already paid out £3000 in fines without getting to the bottom of what they should be doing. They had heard that they should be able to claim any TAX back from the UK but have had no joy with the pension compnay either. They are very old and my grandfather has recently had a stroke so I would appreciate if anyone can get in touch with me (I am in the UK) about this if they have any useful info.

Many thanks

Louise

Comments

  • Your grandparents need to get their pension paid gross and then they will only pay tax while they live in Madeira. This is called 'double taxation' and if pay tax in the UK and live in Madeira you are liable to tax as a resident. You should also contact their tax office in the UK for refund of some tax paid and make sure that their tax code is chenged to NT.
  • Many thanks for your response. I will let them know that they really do need to get in touch with the UK Tax office, which it was that easy!

    Cheers

    Louise
  • You don't say what type of pension; state pension, government pension (teacher, civil service) or private pension. There are differences. Government pensions are only taxed in the UK and although you have to declare here they are not taxed again. They cannot be paid gross unlike state and private pensions.
  • Hi Robert

    Thank you so much for responding. I will find out but I expect its a private pension.

    Louise
  • Hi Louise,
    I have just seen your email with interest, due to new and exiting law change to attract investors from both in and outside of the EU. Portugal has become an EU tax haven after Malta. Zero taxes on pensions dating back from Jan-2012 for a period of ten years and a non inheritance tax. You can even buy or build your home tax free, but there are restrictions. I'm here to help the Norwegians set up a second home.
    Cheers,
    Victor
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