Paying NI on a foreign income pension?
Discussion
My pension is paid in US$ from overseas, into U.K. bank. I have been out of the system since 1989 but have done a tax return every year since 2002, and no payment required.
Not living in the UK and not paying income tax, I never paid NI deductions. Obviously no state pension coming my way in the future.
So, as of this year, I am living back in the U.K. and I assume I will have to pay the usual income tax on my relatively small pension income as it is over £10,000 a year. But, how do I pay the NI part?
Years ago I was told by my tax accountant I could make ‘voluntary contributions’ to,the NI system, but that there was no point in doing it. I paid little attention as I was living overseas with no plans to return. But we all know how life has a habit of changing suddenly.
I am recieving Child Benefit currently, as my daughter is still in school, so I believe that actually covers NI contributions in some form, but should I pay anything else in?
Anyway, I’m am pretty unfamiliar with the whole system, not having been in it for so long. Any information out there?
Not living in the UK and not paying income tax, I never paid NI deductions. Obviously no state pension coming my way in the future.
So, as of this year, I am living back in the U.K. and I assume I will have to pay the usual income tax on my relatively small pension income as it is over £10,000 a year. But, how do I pay the NI part?
Years ago I was told by my tax accountant I could make ‘voluntary contributions’ to,the NI system, but that there was no point in doing it. I paid little attention as I was living overseas with no plans to return. But we all know how life has a habit of changing suddenly.
I am recieving Child Benefit currently, as my daughter is still in school, so I believe that actually covers NI contributions in some form, but should I pay anything else in?
Anyway, I’m am pretty unfamiliar with the whole system, not having been in it for so long. Any information out there?
Age is important because there is no obligation to pay NI after you reach Sate Pension Age. For a male born in 1960, this will be on attaining the age of 66.
For those who have not being paying into NI for a long time, this will obviously have an impact on your entitlement to State Pension. You can make voluntary payments starting now until your 66th birthday. You can also make voluntary payments for some of the gap years you missed out on.
If you start working between now and your 66th birthday, you will automatically have to pay NI if your income exceeds the Lower Earnings Limit (£5,846 per year). How you make NI payments depends on the nature of your income. Employees and company directors suffer Class 1 NI as a deduction from their salary. The self employed pay Class 2 and Class 4 NI based on their annual profits over £5,846. Class 2 is due to be abolished but Class 4 will be increased to compensate.
https://www.gov.uk/national-insurance
http://www.which.co.uk/money/pensions-and-retireme...
For those who have not being paying into NI for a long time, this will obviously have an impact on your entitlement to State Pension. You can make voluntary payments starting now until your 66th birthday. You can also make voluntary payments for some of the gap years you missed out on.
If you start working between now and your 66th birthday, you will automatically have to pay NI if your income exceeds the Lower Earnings Limit (£5,846 per year). How you make NI payments depends on the nature of your income. Employees and company directors suffer Class 1 NI as a deduction from their salary. The self employed pay Class 2 and Class 4 NI based on their annual profits over £5,846. Class 2 is due to be abolished but Class 4 will be increased to compensate.
https://www.gov.uk/national-insurance
http://www.which.co.uk/money/pensions-and-retireme...
King Herald said:
I have a long, long way to go before I would get the full state pension, 35 years of contributions. 
I dread to think how much back payment voluntary contribution I would need to get £155 a week back, in another ten years when I reach 67. Or whatever it will have changed to by then.
But you would get something. I dread to think how much back payment voluntary contribution I would need to get £155 a week back, in another ten years when I reach 67. Or whatever it will have changed to by then.You can use on line calculators to work out what entitlement you will get - even if you just start paying NI now.
As I said, if you start an employment somewhere, you will be paying Class 1 NI anyway.
You say this is a pension distribution from an overseas pension fund? There is no NIC to pay on pension distributions.
As for paying NIC, as Eric said you can make voluntary contributions and you'll also pay on employment/self employment income you earn. Don't forget you may be entitled to a state pension from the countries you have been living and working in all these years.
As for paying NIC, as Eric said you can make voluntary contributions and you'll also pay on employment/self employment income you earn. Don't forget you may be entitled to a state pension from the countries you have been living and working in all these years.
Edited by LC23 on Sunday 22 October 10:05
Eric Mc said:
But you would get something.
You can use on line calculators to work out what entitlement you will get - even if you just start paying NI now.
As I said, if you start an employment somewhere, you will be paying Class 1 NI anyway.
I tried one of those calculators, but it told me it could not calculate because I had spent time working of living overseas. You can use on line calculators to work out what entitlement you will get - even if you just start paying NI now.
As I said, if you start an employment somewhere, you will be paying Class 1 NI anyway.
LC23 said:
You say this is a pension distribution from an overseas pension fund? There is no NIC to pay on pension distributions.
As for paying NIC, as Eric said you can make voluntary contributions and you'll also pay on employment/self employment income you earn. Don't forget you may be entitled to a state pension frompen the countries you have been living and working in all these years.
I was working offshore, for a US company, based in the Virgin Islands, and the pension is based from Dubai. No pension was paid into other than my company system. As for paying NIC, as Eric said you can make voluntary contributions and you'll also pay on employment/self employment income you earn. Don't forget you may be entitled to a state pension frompen the countries you have been living and working in all these years.
Interesting what you say, no NIC on foreign pension distributions. I assume I do have to pay tax though......
https://www.gov.uk/check-national-insurance-record
Have a look at this site, I'm in a similar position but older and still overseas, just topped up my paid years to 30 cost was around 200 pounds per missing year.
Rules are changing in the near future, but for me it was worth back paying.
Have a look at this site, I'm in a similar position but older and still overseas, just topped up my paid years to 30 cost was around 200 pounds per missing year.
Rules are changing in the near future, but for me it was worth back paying.
King Herald said:
I was working offshore, for a US company, based in the Virgin Islands, and the pension is based from Dubai. No pension was paid into other than my company system.
Interesting what you say, no NIC on foreign pension distributions. I assume I do have to pay tax though......
Yes you do have to pay tax on this as a UK resident. The UK/UAE double tax treaty confirms this in Article 17.Interesting what you say, no NIC on foreign pension distributions. I assume I do have to pay tax though......
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