UK Pension summary - National Insurance Credits?

[TokyoSurvivor]

Going off on slight tangent, and assuming your wife is Japanese. Is she also going to apply for a UK state pension? I have heard of people on this forum who have been able to get their Japanese spouses on the UK state pension while residing in the UK.

I was just looking into this and wondering how/if people here from the UK with a Japanese spouse are doing this?

I checked ChatGPT to get an idea, and if my wife wanted to pay the full 35 years (Class 3) it would cost the following:
35 years×907.40 GBP per year=£31,759

If accurate, it's an amazing investment. She would then get the full UK State Pension, which is currently £203.85 per week (about £10,600 per year).

Would love to hear others opinions on this. Does this sound accurate? Any Japanese tax implications for example?

I think a non-British spouse who wants to pay voluntary National insurance contributions from outside the UK would have to have resided in the UK for a few years.

Yes, one of the following:

- Lived in the UK for at least 3 years in a row, or
- Paid at least 3 years of National Insurance contributions.

So for some people who have the option to plan, moving back to the UK for 3 years, and then paying up voluntary contributions after moving back here could be a strategy.
If you have a child and want to put them through the UK University system, this 3 years could also drastically reduce the fees.

[beanhead]

Ah OK. I had thought under current rules, to qualify for a UK State Pension, an individual would need at least 10 qualifying years of National Insurance contributions. However, to purchase voluntary National Insurance credits for my wife would not need a minimum of 3 years of previous contributions.

I am likely wrong though. Will look into it further.

NI number definitely needed, so as Wales wrote, she would have had to live in the UK and made contributions. Details below:

https://retirewiki.jp/wiki/United_Kingd ... rom_abroad

[Wales4rugbyWC23]

I was just looking into this and wondering how/if people here from the UK with a Japanese spouse are doing this?

I checked ChatGPT to get an idea, and if my wife wanted to pay the full 35 years (Class 3) it would cost the following:
35 years×907.40 GBP per year=£31,759

If accurate, it's an amazing investment. She would then get the full UK State Pension, which is currently £203.85 per week (about £10,600 per year).

Would love to hear others opinions on this. Does this sound accurate? Any Japanese tax implications for example?

I think a non-British spouse who wants to pay voluntary National insurance contributions from outside the UK would have to have resided in the UK for a few years.

Yes, one of the following:

- Lived in the UK for at least 3 years in a row, or
- Paid at least 3 years of National Insurance contributions.

So for some people who have the option to plan, moving back to the UK for 3 years, and then paying up voluntary contributions after moving back here could be a strategy.
If you have a child and want to put them through the UK University system, this 3 years could also drastically reduce the fees.

Your child would have had to have lived in the UK for three years preceding university, not just your spouse.

[TokyoSurvivor]

I think a non-British spouse who wants to pay voluntary National insurance contributions from outside the UK would have to have resided in the UK for a few years.

Yes, one of the following:

- Lived in the UK for at least 3 years in a row, or
- Paid at least 3 years of National Insurance contributions.

So for some people who have the option to plan, moving back to the UK for 3 years, and then paying up voluntary contributions after moving back here could be a strategy.
If you have a child and want to put them through the UK University system, this 3 years could also drastically reduce the fees.

Your child would have had to have lived in the UK for three years preceding university, not just your spouse.

Yes, understood. The idea being, all would locate to the UK for three years at the same time to get the maximum benefit.
I could also throw in selling any inherited real estate as well to remove Japan's CGT which is calculated from the time it was originally purchased (in my case the 1970's).

[Wales4rugbyWC23]

Yes, one of the following:

- Lived in the UK for at least 3 years in a row, or
- Paid at least 3 years of National Insurance contributions.

So for some people who have the option to plan, moving back to the UK for 3 years, and then paying up voluntary contributions after moving back here could be a strategy.
If you have a child and want to put them through the UK University system, this 3 years could also drastically reduce the fees.

Your child would have had to have lived in the UK for three years preceding university, not just your spouse.

Yes, understood. The idea being, all would locate to the UK for three years at the same time to get the maximum benefit.
I could also throw in selling any inherited real estate as well to remove Japan's CGT which is calculated from the time it was originally purchased (in my case the 1970's).

Did you purchase the house, or did you inherit it? No British CGT with inheritance until you have the deeds and any increase in value after that. I am not sure if Japanese CGT is the same.

[RetireJapan]

I am not sure if Japanese CGT is the same.

It isn't sadly. Bit of a shock for a lot of people. You inherit the capital gains tax liability on the original purchase price, although I think you are allowed to deduct some of the inheritance tax paid from it if you sell within a couple of years.

[Wales4rugbyWC23]

I am not sure if Japanese CGT is the same.

It isn't sadly. Bit of a shock for a lot of people. You inherit the capital gains tax liability on the original purchase price, although I think you are allowed to deduct some of the inheritance tax paid from it if you sell within a couple of years.

Yes, I have heard this on the grapevine, too. It makes it very difficult with property inheritances (huge Japanese capital gains tax liabilities) in the UK given the huge increases in house prices over the last few decades.

[TokyoSurvivor]

I am not sure if Japanese CGT is the same.

It isn't sadly. Bit of a shock for a lot of people. You inherit the capital gains tax liability on the original purchase price, although I think you are allowed to deduct some of the inheritance tax paid from it if you sell within a couple of years.

Yes, I have heard this on the grapevine, too. It makes it very difficult with property inheritances (huge Japanese capital gains tax liabilities) in the UK given the huge increases in house prices over the last few decades.

I've looked into this a bit and basically for inherited real estate, you pay the CGT on anything over what was originally paid for it. In a lot of cases, this is what your parents paid for the house. Obviously if that was from before the housing boom of the 1980s (as in my case), that is a very large amount subject to Japanese CGT. This alone makes it a serious consideration to move back to the UK, cut financial ties with Japan (and what ever else is required), then sell the house.

Just as an example, if you inherited a house today originally purchase for 40,000 GBP, but now with a value of 750,000 GBP (and then sold it for 750,000), there would be zero CGT to pay in the UK.

Capital Gains Tax in Japan however would be around £132,487 (or approx 24,500,000 JPY).
This is based on a 710,000 GBP capital gain and a June 1st 1980 GBP/JPY exchange rate when originally purchased.

At least that's what I understand. Please let me know if I'm wrong!

[Seasider4374]

Can I just check if my ex-wife (Japanese national) is eligible to claim a UK pension, or (even better) able to contribute yearly payments from overseas to boost her pot?

She has a NI number, and made only 32months contributions, but lived in the UK for 6-7years.

If relevant we divorced in Japan, after leaving the UK.

[adamu]

Can I just check if my ex-wife (Japanese national) is eligible to claim a UK pension, or (even better) able to contribute yearly payments from overseas to boost her pot?

She has a NI number, and made only 32months contributions, but lived in the UK for 6-7years.

If relevant we divorced in Japan, after leaving the UK.

Not to claim right now, but she should be able to sign up for voluntary contributions to become eligible.