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Overseas Jersey pensioners “being taxed too much”

Overseas Jersey pensioners “being taxed too much”

Tuesday 05 December 2017

Overseas Jersey pensioners “being taxed too much”

Tuesday 05 December 2017

A retired Jersey couple living abroad who pay the top rate of tax on their pension say that the rules on the 20% rate are in breach of their human rights.

The Portugal-based islanders, whose names have been changed due to an upcoming appeal, say the current tax system loses them up to £4,000 a year simply because they decided not to retire in Jersey.

That’s because tax allowances are dropped for those in receipt of a pension who decide to fully cut ties to the island and settle abroad, meaning that they have to pay ‘20 means 20’ rate of tax.

In this couple’s case, they’re paying £6,000 per year, when they would be paying just £2,000 in Jersey.

“When we lived in Jersey we were entitled to marginal relief. Marginal relief would’ve reduced our tax bill by 70% or something like that. Because we don’t live in Jersey anymore, we lose all such benefits. Now, given we don’t live in Jersey and we don’t use the services that taxation funds that just seems really unfair to us,” Mr Howard told Express.

The issue, he said, was one of unfortunate timing and a “discriminatory” tax policy.

After taking early retirement in 2013 through no choice of Mr Howard’s own, the couple found themselves struggling to keep pace with the cost of living in the island. In 2015, they decided to make a move.

“We found it very expensive to live in Jersey just on a pension. We found it quite difficult so we made the decision to sell up and start again down here, which we don’t regret, but this Jersey income tax bill still grates and grinds.”

plane flying fly tourism tourist airplane travel

Pictured: The formerly Jersey-based pair dispute their current tax rates - they claim that they should not be discriminated against just because they chose to leave the island.

But that decision to move abroad coincided with the 2016 Budget, which ushered in a change: the removal of non-residents’ tax relief.

The move, the Treasury Minister said at the time, would see the island take in an extra £500,000 by making a portion of people not in Jersey pay the top rate of tax on any income derived from the island.

"It kind of caught us out immediately - the very next tax return."

But while the Howards are not against paying tax, they say that not being allowed a relief is unjust - and argue that it could even be a breach of their human rights.

“If you read the Universal Declaration of Human Rights, Article Two says you should not be discriminated against by virtue of your residence. Now that to me seems pretty cut and dry that they can’t do that,” he said.

They’ve so far taken their appeal to the Taxes Office, which apparently “fell on deaf ears”.

Their next move is to return to the island next Spring to make a formal appeal against the charge in a bid to get their “lost” pension money back. “Hopefully it will fall on sympathetic ears,” Mr Howard added.

If successful, the appeal could have wider implications for others who have settled abroad.

A recent Freedom of Information (FOI) request revealed that over 13,000 islanders in receipt of a pension no longer resided in Jersey - more than 40% of the overall number of people receiving an island pension.

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Posted by Gail Lees on
This is disgraceful. This couple are not even using Jersey's facilities and are being taxed like top rate payers. How did this discriminatory law ever get passed ?
Posted by nigel pearce on
Pensions, from earnings already taxed, should not be taxed, (double taxed), at all.
Posted by Adrian Le Corre on
Much like the people using Jersey's facilities and not paying a penny in tax!!
Posted by Garry Toy on
This tax treatment is appropriate in my view and is in keeping with the ever-evolving application of taxes in the UK and its dependent territories (e.g. NRCGT, etc.). What has not been mentioned here is the tax 'burden' being suffered by this couple as residents of Portugal. It is possible for them to take up residence there on a non-habitual basis, which would result in them paying no income tax on their remitted pension income, despite the potential for them to enjoy "the services that taxation funds" in Portugal.
Posted by Valerie Payne on
I think it is a disgrace that we have to pay tax on our pensions in any case. We have already paid tax on our earnings and worked hard for our money. Then we get taxed again on the pension we receive from the States and we have to pay Long Term Care allowance on the top of this!
Posted by Trevor Carre on
Same thing happened to my Jersey born parents. On retiring they moved to France. Pension taxed in Jersey, but when they come over to Jersey to visit family and friends they are not even allowed to have a free bus pass.
Posted by Robert Dale on
I have been fighting this for ages,Income tax department don't care,just sent an email to the treasury but waiting a reply.No tax agreement with Spain and don't intend to pay tax twice.All the years i have been away from jersey I have declared everything,but now they want make my life difficult by imposing this tax.I paid my contributions for 40 years in Jersey,and now they want it back because I don't choose to live there anymore,Just a warning to others who might be considering retiring abroad,make sure you keep one foot in the door in Jersey,even if you have to Lie.
Posted by Bo In Jersey on
It's a good opportunity for those who think they will be affected in the future to vote Mr Maclean out in May. Now that parents have got near on free university places they can vote the same way.
Posted by John Roberts on
To charge higher rates of tax to somebody who has retired abroad than those who live here seems simply discriminatory. Presumably they are considered to be easy targets because they no longer have a vote and no possibility of moving their pensions from Jersey
Posted by Davey West on
Pensioners could not live on the dismal amount they get at the end of month payment, unless they are further benefits or own there flat or house therefore no rent to pay. Food is ridiculously expensive, and pensioners pay GST as well on everything
Moving to cheaper pastures possibly to be nearer a family that helps make life better in later years should not result in a cut in the pension received. Roll on the election and get these ministers out.
Posted by ROGER BARA on
I have complained personally to the Chief Minister that this is highly unfair - we ex-residents living abroad are entitled to ABSOLUTELY NOTHING in Jersey, yet, we have to pay 20 per cent on our Jersey Pensions without any allowances. Legal advice tells us that we have a good case. I will be taking this further, and am happy to to public to say so.
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