Korean Job Discussion Forums

Boodleheimer · Posted: Sat Aug 26, 2006 8:42 pm Post subject: UK Pension stuff

i'm american and my boyfriend is from the UK. i'm going to get my pension deductions back in a lump sum (which is nice).

we went to efllaw.com to check out his situation, and it says "The U.K. has negotiated a contribution only agreement. This means that a foreigner from the U.K. who is employed in Korea may benefit from the elimination of dual coverage, but will not get a lump sum refund."

what does this mean?

--and i totally think there should be a hypen in "contribution-only"--

tzechuk · Joined: 20 Dec 2004

That means we poor Brits don't get the money we've "voluntarily contributed" to the Korean Government back.

chronicpride · Joined: 16 Jan 2003

trigger123 · Posted: Sun Aug 27, 2006 1:04 am Post subject:

sorry, but speaking from experience, thats not exactly true.

the korean and british governments do not have a mutual agreement in place, which means that any contributions UK citizens make while in korea are not credited to a UK pension and are not redeemable. other E2 states have this agreement and credits are redeemable.

your boyriend should also inform his local UK tax office of his plans to work overseas as this will affect his tax status. he will most likely need to complete a self-assessment tax form annually for the duration of his stay, and also supply all pay checks. also, be prepared to declare all monies transferred home as you may be asked to pay tax on them. well... that depends on how honest you are....

'i'm the taxman! declare the pennies on your eyes....'

stalinsdad · Joined: 25 Jan 2003 Location: Jeonju

Trigger I think you are wrong.
Only if you work for a British company abroad.
If you work for a foreign company you have already paid the tax and it is not illegal to return to the UK or any other country with monies.
I think looking at the mutual agreement between the UK and Korea(i'm saying this because it is not clear) pension paid in Korea is non-transferable to the UK pension system and is regained ONLY in Korea at the time of your retirement-hence for most people it is lost.
If you go to the FAQ board here on Daves you can see the link to the mutual agreement between Korea and the UK.

trigger123 · Posted: Mon Aug 28, 2006 3:14 am Post subject:

ah, it's not illegal to bring monies earned overseas back to the uk, but you will have to declare what you have sent and it is taxable as earnings
upon submitting your self-assessment forms. avoiding tax on earnings is an offence, so i would advise people to be aware of what they need to do to avoid breaking the law....
and the bit about the pension is bang on the money, so to speak, and exactly what i was told when i got back to the uk.
apologies if i wasn't clear, stalinsdad said it better than myself...

stalinsdad · Joined: 25 Jan 2003 Location: Jeonju

NP Trigger
Is the self assessment form from the Korean tax system or the Tax office in the UK?
Surely it is wrong to pay tax twice?
What do you need from the tax office here in Korea?

davyteacher · Joined: 27 Aug 2004 Location: Busan, South Korea.

Not if you send all the money you have earned in your wife`s name to a bank account in England.

trigger123 · Posted: Tue Aug 29, 2006 11:40 am Post subject:

okey dokey, this is what i now know...

when you leave to uk to work outside of the EU, and have a 12 month contract to fulfill, you are obliged to inform your local UK tax office. they will want to know what you are doing, and approximately how much you expect to earn, gross and net, during your stay. if you don�t tell them, its not the end of the world, but it saves hassle later.

when you return to the UK, you will have to complete a self-assessment tax form for your entire stay. it�s likely that an overseas stay will have been completed across two tax years, (unless you go on April 1 and return March 31 the following year), so you will have two to complete.
they are not necessarily looking to take money from you. all uk citizens have a certain amount of their annual earnings which are not taxable, (around 5 grand i think) and the rest is taxed at the appropriate rate. the wierd thing for me was that one year they calculated they owed me money as i was overtaxed (cos i hadn�t told them i�d gone overseas, worked on my return, and was on the wrong tax code in my next job) and another year i owed them.

now i�m not saying this next bit is fair, but its what happened to me... basically you are not taxed on your foreign income, (as you have already been taxed on it overseas), but it will count towards your annual personal taxable allowance. overseas earnings aren�t taxed per se, but you will find that they will be taken into account when they calculate your new tax code upon your return. even though your overseas earnings are just that, �from overseas�, you may find they have an impact on what tax you pay.

to be honest though, i would advise giving them details of your net pay and not the gross, cos you�ve already been taxed and you�ll not get those penison contributions, (which make up part of your korean tax), back anyway.

also, you won�t have paid national insurance during the overseas stay, and if you wish to claim a state pension later, you will have to make up these missed contributions at a later date, either as a lump sum or on a monthly extra contribution from your uk pay packet.

your school will handle the processing of your tax when you sign up... or hey, they should do! state schools are commonly better at doing this, but it can�t hurt to ask to make sure. get copies of your pay slips if they are available too, and ask to be told what each item is. my first hagwon never gave them out, so they might not be available, but again, ask.

finally, yes it is wrong to pay tax twice, but its a tricky business and they will get �their� money somehow... �i�m the TAXMAN!�

davyteacher - yeah, that would work... knew i should have got me a korean wife! gosh and darn...