3578 Receiving UK Pension in Italy

I was about to post a link to a previous thread that discussed this ([url=http://www.italymag.co.uk/forums/general-chat-about-italy-italy-magazine-forums/2813-transferring-pension-payments.html?highlight=pension]here[/url]) but then found it was your thread!

Was there anything more specific you needed to know about that wasn't covered in the previous post?

[QUOTE=Mannette]My husband has taken early retirement from his job as a Russian lecturer at Glasgow University, and we have bought a small flat in Bologna. We are relocating there completely and not keeping any property in the UK. At present he will only have his university pension. As this will come to him already taxed in the UK, does this mean there will be no tax liability in Italy? I presume there is a reciprocal arrangement of some kind? Does anyone who is already retired to Italy fulltime have experience of this? Sorry if this is a subject which has been covered before (which I'm sure it has). I've picked up on other people's advice to use the Nationwide Flexi Account to access funds free of charge. Any other thoughts welcome. Thanks. Marie Dunn[/QUOTE]

Pensions are taxable in the country of residence. The fact that the pension is already taxed at source is relevant insofar the Italian authorities will provide a tax credit against the Italian tax bill for those taxes paid in the UK at source.

It is also possible to apply to the UK not to be taxed at source however first you must make yourselves known to the Italian tax authorities. The UK authorities need to know that you will be taxed in Italy before they agree to pay the pension gross.

[QUOTE=tuscanhills]I was about to post a link to a previous thread that discussed this ([url=http://www.italymag.co.uk/forums/general-chat-about-italy-italy-magazine-forums/2813-transferring-pension-payments.html?highlight=pension]here[/url]) but then found it was your thread!

Was there anything more specific you needed to know about that wasn't covered in the previous post?[/QUOTE]
The main issue now is the tax one: where is it best to pay the tax. Now that I have ready Michael Murphy's reply, I guess it would make sense to take professional advice to avoid any pitfalls further down the road.

You might find that there is no choice in where you pay tax. If I understand correctly your tax residence will be where you spend most of your time. The normal cut-off is half a year, which is to say that if you spend more than half a year in one location, that location becomes your tax residence and where you pay your tax, under the rules there.

You can't really choose where you pay your tax, you have to follow the rules. There will be some loopholes you can take advantage of for sure, but overall you just have to pay what's due. Most likely scenario will be that you become Italian residents (for tax) and pay all your tax bill to Italy (they have a global taxation approach, very similar to USA etc). That's fine, because you can arrange to have all your UK income paid Gross in preparation for the tax being due in Italy.

Any good accountant should quickly be able to sort it out for you - it's really not too tricky, though will require some getting used to.

IIOH