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Posted Sun, 16 Oct 2022 14:48:39 GMT by dijeah
I am an Indian citizen. I am UK resident for 3.5 years and non domiciled. Last year I switched to a new job in the UK, so I withdrew the Employee Provident Fund (type of pension contribution) that I had in India. This amount was deposited into my Indian bank account. Do I need to include this amount in my foreign income in self assessment? I tried to figure it out through the DTAA document , but yet I am confused.
Posted Thu, 20 Oct 2022 11:01:41 GMT by HMRC Admin 20
Hi dijeah,

Withdrawal from the employee provident fund, would appear to be a trivial commutation lump sum.  
Article 20 of the double taxation agreement between the UK and India does not allow for any relief for trivial commutation lump sums, which means that it is potentially taxable in the United Kingdom.  
As you are UK resident but non domiciled, you are taxable on your UK sources income and any foreign income which you bring into the United Kingdom, under the arising basis or if you meet the criteria, the remittance basis.  
Guidance on tax on foreign income can be found at Tax on foreign income and the remittance basis at Remittance basis 2021 (HS264)

Thank you.
Posted Thu, 10 Nov 2022 23:30:00 GMT by dijeah
Hi, Thanks for replying. While filing the return, it mentions two confusing statements in the section "Help about: Foreign Income 07 - Overseas pensions, social security benefits and royalties etc" : 1) "Also include lump sum payments from overseas schemes that are taxable as pension income." 2) "Don’t include pensions or lump sums from overseas pension schemes here; you should include these in the ‘UK pensions, annuities and other state benefits received’." In which section do I mention it? It's confusing.
Posted Sun, 13 Nov 2022 03:42:46 GMT by dijeah
Additionally, as per the below link, it mentions that Government pension schemes are only taxable in India.  So going by that , since EPFO is a government scheme, I do not have to mention the lumpsum of it that I have received. Am I right?
Posted Tue, 15 Nov 2022 11:32:28 GMT by HMRC Admin 17

Hi,
 
You will declare the pension from India under the foreign income page  .

Thank you.
Posted Wed, 16 Nov 2022 15:42:40 GMT by HMRC Admin 32
Hi,

As per Article 19 of the double taxation treaty with India, the government pension is only taxable there so should not be declared in the UK.

Thank you.
Posted Fri, 06 Jan 2023 09:27:23 GMT by aghan
Hello, I'm facing a similar conundrum here. I'm an Indian national working in the UK for the past 3 years, been a UK tax resident (non-domiciled) for those years. I had withdrawn my Employee provident fund, which is an Indian government pension scheme last year, the amount of which made its way to my Indian bank account. There are conflicting answers here on whether to report this withdrawal in the UK self-assessment. Do we need to report it in the UK tax self-assessment? Or not? If we need to report it, in which section do we need to report it ? Thank you so much for your help!
Posted Wed, 11 Jan 2023 12:40:48 GMT by
Hi aghan,

You will need to review the guidance on remittance of incomes to the UK at:

Guidance note for residence, domicile and the remittance basis: RDR1

The remittance basis is an alternative tax treatment available to people who are UK resident but not domiciled in the UK and who have foreign income and gains.  

When you’re eligible and choose to use the remittance basis, you will be liable to UK tax on all of your UK income and gains as they arise or accrue each year and your foreign income and gains if and when you bring (remit) them to the UK, including any property which derives from those income and gains.

Thank you. 
 
Posted Wed, 11 Jan 2023 13:37:30 GMT by aghan
Thank you for your reply. Yes, I have reviewed those guidelines. I found out that I'm a non-domiciled UK tax resident (who is an Indian national). My real question was: I moved to the UK 3 years back. I had withdrawn my Employee provident fund (EPFO) last year to which I had made contributions when I was in India at an Indian job. Is the Indian government's EPFO scheme counted as a government scheme and is not taxable in the UK as per Article 19 of the Double Tax treaty with India? For reference, the withdrawal was more than 2,000 pounds but it's a mix of my own contribution, contributions of my past employer, and interest accrued.
Posted Mon, 16 Jan 2023 15:51:29 GMT by HMRC Admin 32
Hi,

Withdrawal from the employee provident fund, would appear to be a trivial commutation lump sum. Article 20 of the double taxation agreement between the UK and India does not allow for any relief for trivial commutation lump sums, which means that it is potentially taxable in the United Kingdom.

Thank you.

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