Pensions Advice

NT Tax Code HMRC: How To Apply NT Tax Code for Non-UK Residents

NT Tax Code HMRC: How To Apply NT Tax Code for Non-UK Residents

When it comes to making pension withdrawals from your UK pension scheme, there are certain steps you must follow with HMRC if you wish for your withdrawal to be paid to you in gross (i.e. non-UK income tax automatically applied). This is a question that many of our clients have. They want to know if their pension will be given to them in full while residing outside the United Kingdom. 

However, when you withdraw from an International SIPP or QROPS, the provider or trustee is required by law to apply tax on your withdrawal. If you are a non-resident of the United Kingdom, you will likely want to obtain an NT tax code on part or all of your UK income. Non-residency tax in the United Kingdom is complicated, and the laws differ based on where you live and several other reasons. 

However, if you are a non-resident of the United Kingdom, you will likely want to obtain an NT tax code (No Tax) on part or all your UK income. Non-residency tax in the United Kingdom can be complicated, and the laws differ based on where you live, along with several other reasons.

Before discussing further, our CEO and Independent Financial Advisor, Dominic James Murray, explains what is an NT tax code and how to apply one for non-UK residents in one of our YouTube videos below.

What Exactly Is The NT Tax Code?

NT Tax Code implies that there is no tax due on this withdrawal. Therefore, in general, HMRC has advised your employer, if you are still working, or the trustee or pension provider, if you have withdrawn the benefit of your pension pool, not to deduct any tax from this income source.

The P85 form can only be used if you lived and worked in the UK, left the UK and will not be returning, or plan to work abroad full-time for at least one full tax year. A tax year runs from April 6 through April 5 of the following year.

Why aren’t you paying taxes on this income? You were granted code NT because you disclose income in a way that HMRC has approved to, maybe because you live in a country with a DTA with the UK government.

Double Tax Agreements (DTAs) work as follows; You may be allocated code NT if you reside in a nation in which the UK has a double taxation agreement. This means you won’t have to pay tax in your home country and the UK on the same assets or income.

How Does The NT Tax Code Work?

The tax paperwork might be intricate, but in essence, it proceeds like that though: Pension income will be treated as income under the Pay As You Earn (PAYE) system; you may not pay the actual tax at the correct time; you may receive PAYE coding notifications from HMRC or papers (such as a P85) from your pension provider; you may need to claim a tax refund or pay more tax afterward, and HMRC may send you a tax calculation or Self Assessment tax return.

The PAYE system deducts tax at the point of purchase. For those of you who are or have been employed, you may be familiar with this as a method through which your employer deducts tax from your earnings or pay. However, the PAYE system deducts tax when applied to pension income – no NI payments are due on pension income.

Your pension payment’s taxation depends on whether you choose to accept part or all of your fund, have additional PAYE income, or get the state pension.

As previously stated, depending on how you decide to utilize your tax-free cash sum, just a portion of your pension payout may be taxable. The following considerations apply exclusively to the portion of the total that will be taxed.

The pension provider employs a PAYE code number, calculated on an ’emergency’ or month 1/week 1′ basis. It is not necessary to give a P85 for the tax year when you receive your pension, unless you choose to do so, in which case the pension provider should take the code number from the P85 and use it.

If you have quit working, you should receive a P85 from your prior employer or potentially from another pension provider if you have previously taken the whole amount out of another pension pool. A P85 reveals how much you’ve made and how much tax you’ve paid since April 6, as well as the code number your company has used.

However, there is an obvious process for obtaining this tax code, which allows you to have your pension contributions paid to your gross. Then it will be your responsibility to declare them on your tax returns in your country of origin. The form that is required is the P85 form, which must be completed and returned to HMRC.

How to Apply NT Tax Code

To begin, you must go to your local government office. Simply request the paperwork demonstrating that you are a local tax resident once you arrive. However, keep in mind that it is your obligation to report this income in the nation in which you work.

The next step is to fill out the P85 form on the HMRC website. You can find instructions for this already. This may be done online or by mail. Thereafter, you will be given your NT (Nil Tax) code. As a result, the gross amount is deducted from your pension from now on.

How Long Does The Process of Filling Up NT Tax Forms Take?

Unsurprisingly, it will not happen overnight with HMRC. The typical completion time is six to eight weeks. However, there have been times when it has taken much longer.

So, we suggest our clients start this process around six months in advance of when they are wishing to take UK pension income. Allowing sufficient time for the NT code to be applied when making withdrawals from your UK pension plan.

Get Your Free Initial Consultation on NT Tax Code for Your UK Pension Transfer at Cameron James

UK pension transfer involves a lot of work in terms of due diligence, paperwork, and the time consumed which could last up to eight weeks. Taxation, on the other hand, is one of the aspects that you have to consider, particularly if you are living outside the UK.

Applying for NT tax code is one of the things you should consider doing to avoid getting double-taxed on your income tax. At Cameron James, we have helped non-UK residents in numerous countries to successfully obtain their NT tax code when making withdrawals from the UK pension asset. As such, we are very well-experienced in this area and the hands-on process that goes with it.

However, it is important to note that we are not independent tax advisers, and should you ever wish to seek clarification on any tax issues, we advise you to seek independent and professional tax advice in your country of residency.

We are an FCA-regulated and well-regarded pension transfer specialist in the industry. We believe you have questions about defined benefit pension, especially if you are looking to transfer your UK pension overseas.

Click the button below to have a free initial consultation with one of our qualified independent financial advisor and get the best financial advice on your UK pension transfer.

Pensions Advice

Cameron James – CEO Annual Review (2021)

Final Salary Pension Transfer to International SIPP (Process & Steps)

2021 has been a great resurrection year following the blow of the pandemic that shuts significant economic and financial aspects of countries around the world. With countries slowly rebuilding their economies and trying to recover what is lost. Obviously, there are still uncertainties, especially with the new Covid-19 variant that emerging, the Omicron variant.

For Cameron James, 2021 has been a great year in terms of the market and the company’s growth. We saw growth of clients in the US, a rising YouTube channel that provides great content that fills the viewers’ needs, and future positive plans that we prepared to welcome 2022 with discounts program that you should not be missed. All of that we wrap in this blog below.

Global Economic Review

Following the 2020 Global Pandemic, the global economy began to recover in 2021. The Covid-19 Pandemic had a greater impact on certain nations than others, with others experiencing more localized problems as a result of the pandemic. As a result of unequal global openness, labour shortages and supply concerns have been worsened by unpredictable inflation.

In general, advanced economies have outperformed developing economies, with the United States being a notable exception. Despite the rise of Covid-19 cases and newly variant Omicron, US consumers’ confidence has remained strong.

The recent recovery in the Asia-Pacific region has been delayed by Covid-19 policies. Although the area was effectively counter-attacking the virus in the early phases of the pandemic, there are people who are still reluctant to take the vaccine. Fortunately, the opening of borders and movement have recently returned to the countries which can support the economies despite the emerging of the Omicron variant that is still rarely seen in the region.

Consumer confidence is increasing as developing economies loosen their regulatory restraints. Emerging economies such as Russia, Poland, Indonesia, Chile, and Brazil have GDP levels that are equal to or higher than those before to the pandemic.

You can download our in-depth quarterly market analysis below.

Cameron James’ 2021 Highlights

For Cameron James itself, 2021 is a year of growth in terms of market as well as a company. With the first highlight goes to our Admin and Chasing team who work tirelessly to complete lots of due diligence to ensure that our clients get not only the top service, but also to assure that their pension transfer is time-efficient.

The next highlight goes to our Digital Marketing Team. With the newly and rising YouTube channel, and the digital campaigns executed through the whole year, the Digital Marketing Team quickly becoming one of the bloodlines of Cameron James where we earn numerous prospective clients to make sure that the business is going and growing.

The last highlight goes to our IFA team, as the advice provider that always give our clients the best service and tailored advice that suits their needs and objectives. Moreover, to keep our high-quality of service on the top level, our IFAs always improve their financial adviser certification annually to ensure that they meet the required regulations and knowledge to give the right advice to their clients as well as to keep themselves updated with the latest regulations from the FCA.

We put other Cameron James’ 2021 highlights in some points below.

Cameron James’ YouTube Channel

As mentioned before, Cameron James’ new YouTube channel is one of the marketing highlights in 2021, especially in the last quarter of this year. Multiple of our new clients are coming from the YouTube channel, with most of them are enquiring about the Final Salary Pension transfer.

Since the first of its launch, our YouTube channel now has growing significantly and have a total of 350 subscribers. We see our YouTube channel as a great alternative of content to blog. Since there are people who prefer to see videos rather than reading a long-form of written text.

We provided a lot of interesting and in-depth content in our YouTube videos such as UK pension transfer, LTA, taxation, QROPS, SIPP, Final Salary Pension and many more. With positive feedback from our viewers saying that our content is helping them to understand pension transfer better, we are planning to launch two videos every week for 2022.

For all answers to your questions about UK pension transfer, head into our YouTube channel, and perhaps you can find answers to your questions there.

Defined Benefit Pension Transfer

With the new regulations set by the UK’s Department for Work and Pensions (DWP), the Final Salary Pension transfer business is getting more and more difficult from time to time. Especially, with the new regulation that is effectively in force in 1st of December 2021. The DWP announce the new system called the Traffic Light System.

This system applies for all upcoming DB transfer process. With this new Traffic Light system, your statutory right to transfer your DB pension without further review will be removed by this new Traffic Light System. Ultimately, the decision to transfer your DB pension will fall into the UK ceding schemes. The reasons are to minimize the chance of you getting scammed in the first place and due to the DB deficits, the UK government is being pushed on an almost weekly basis by UK ceding schemes.

While this regulation will surely prolong the current process of a DB transfer, it is also bad news for any individual looking to transfer their Final Salary Pension into personal pension schemes such as SIPP or QROPS. However, Cameron James did not step back from this complexity. Rather, we see this as an opportunity to become a specialist in the Final Salary Pension Transfer industry, and we look forward to striving in the future.

Cameron James in the US

Compared to last year, Cameron James now have more clients in the US that is spread across 20 states. Thanks to the hard work of our IFA and also Digital Marketing Team, the market in the US is growing more than ever. This makes our presence in the US are more firm and trusted as one of the highly regarded Independent Financial Adviser specialized in UK Pension Transfer.

In the next year, we will be launching our long-awaited US website that is planned to launch this year but due to development issues, we have to postpone it until 2022. The US website is aimed to provide service to prospective clients in the US.

Moreover, it will bring great blog content that we have been preparing since the mid of 2021 with the Content Team. Hopefully, the US website can soon be launched and to improve our growth even more in the US.

What To Expect From Cameron James in 2022

With the new year to come, we have put together some interesting plan and strategies for the coming year. The US website launch, outstanding blog content which will go live along with the US website, and of course, a special discount for our existing and prospective clients all around the world.

Cameron James’ Referral Programme

You’ll be pleased to learn that we’ll be offering a Referral Programme that gives discounts to all of our existing and prospective clients. Referrals are one of the lifeblood of Cameron James. With your support and reference to your colleagues and relatives, we can spread the word about Cameron James’ high-quality service to your friends, family, and co-workers, who may be in similar circumstances to you.

The Referral Programme will offer a discount of 0.10% for the ongoing costs for all existing clients who successfully referring their relatives and friends to sign up with Cameron James. During the initial period (Q1 2022), the Referral Programme will be limited up to 3 persons at maximum. However, the number of referrals will likely be increased if the program is successful.

This new Referral Programme will be using a user-friendly system to ensure that you will not be confused with the how-to’s. All in all, spread the good news and get your discounts in the next year!

Upcoming Blog Content

As we stated above, we have an outstanding Blog Content that we are planning to launch along with the US website. Our Content Team has been crafting numerous of content discussing UK Pension Transfer, taxations, regulations, customers’ case studies, and others that obviously will be useful for you to read, and we cannot wait to serve it in your plate.

Our Content Team is a newly formed department under the Digital Marketing Team that is specialized in creating UK Pension Transfer web-content. We have worked since the Q2 of 2021 to provide our website visitors with a high-quality content that will surely answer their questions or even give them new insights on UK Pension Transfer. We look forward to sharing our content with all of you.

Closing Remarks

Merry Christmas and Happy New Year 2022!