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Posted Thu, 07 Dec 2023 13:58:38 GMT by
Hello, I am ordinarily resident in the UK, but have been working remotely for a foreign employer (based in Guernsey). This employment is shortly due to end, and I am looking to claim a refund of my contributions to my employer's pension scheme. I have been advised by my employer that they must deduct 10% tax in line with Guernsey's requirements, and this is done automatically when they process the refund. However, from what I can see online, the UK has a 20% tax on pension refunds. I am trying to understand where I am liable to pay this tax and if I need to declare it on my Self Assessment form, as I don't believe it should be taxed in both Guernsey and the UK as there is a DTA in place. My employer has said information will be provided to evidence that I have paid tax on my pension refund in Guernsey, which I can submit to HMRC. Will this be sufficient, and am I correct in understanding I won't need to pay tax on it in the UK if I've already paid tax in Guernsey? Thank you.
Posted Tue, 12 Dec 2023 10:30:09 GMT by HMRC Admin 17

Hi ,
 
If the pension contribution refund is paid to you by your employer via your salary, the amount will be included in the P60 figure
which you should enter in the Employment pages (SA102) in your tax return.

You can claim Foreign Tax Credit Relief re: any Guernsey tax deducted in the Foreign pages (SA106) .

See :

Pensions Tax Manual   .

Thank  you .

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