UK Tax on India Gratuity and Superannuation payment

Hi, I am resident of UK for past 10 years. Until last year, I was under India employment and working here as expat under ICT work visa. Last year the status changed, I have moved to UK employment in skill based visa. My India employment terminated and I have received certain termination/retirement benefits. They are termination gratuity for 25 years of my service, and I am expecting to receive another superannuation fund benefit as a lumpsum payment which is accumulation over past 25 years of my service with the indian company. As I am now resident of UK and pay tax here. What tax implication will have on this and how I should calculate the tax on these income here? Please note, both these payments are tax free as per India tax rules. Please advise. Many thanks. Subhas

Further to clarify, payments for these were made to my india account in INR. Could I request guidance on the tax implications for these please? This is the last one I need to sort out before completing my self assessment this month. Thank you 

Hi,

Please refer to Articles 19 and 20 of the double taxation agreement with India:

India: tax treaties

Thank you.

Hi HMRC Admin19, Many thanks for the response. I have read the document now and tax position on pension is clear. However, may I request a bit more clarity and guidance on the lumpsum payment at retirement/Termination? To elaborate, Pension clause applies for periodic payment as a result of past employment - as defined in this tax treaties document you have given the reference here. But, Gratuity and Superannuation are both lumpsum payment for the services completed and one off. In this case the benefit payment received is covering a part of service period when I was Not UK resident (16 years between 1996 and 2012) and a part when I am UK resident (9 years, between 2012 and 2021). Should I consider apportioned 9 years value of the lumpsum for the UK tax or the whole amount of the lumpsum benefit which includes services when I was not in UK? I could not get a clarity on this point from the tax treaties document. If you could kindly advise on this or direct me in any reference document, that will help please. Thanks again Subhas

Continuing with this.. I read further on below link. https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim75550 Does this mean my Gratuity and Superannuation lumpsum payment should be treated with proportional tax as explained in this link? Thanks Subhas

Good morning.. Wondering if I can have any assistance on this please. Many thanks. Subhas

Hi,

As per our previous reply, if they are to be declared in the UK, tax will due based on the other information given in your return.

Thank you.

Hi Subhas Bose,

Under Article 20, the full amount would be taxable in the UK if it is not  a government pension.

Thank you. 

 

Hi,

You would need to check to confirm if your pensin scheme meets any of the conditions laid out and also the guidance previously given in relation to double taxation.

Thank you.