Claiming PAYE from UK pension lump sum

[Neil]

Has anyone received a taxed lump-sum pension payment from the UK and claimed the tax back? I wonder if you could share the procedure?

I cashed in an old private pension and received £14k ~ £15k (¥1.9m) in my UK bank a/c. I plan to leave it there until the exchange rate improves (or an emergency arises).

That’s net of about 25% PAYE which I want to claim back. I assumed I could somehow send the P45 when I receive it from the company to the IR and claim it back as a non-resident. Then looking through gov.uk, I discovered the UK/Japan Double Taxation convention and the form ‘Japan-1-DT’ which you need to complete to avoid being taxed in both countries. So what should I do? Forget the money until/if I transfer it here? Claim from the IR directly? Submit the Japan-1-DT form as soon as I receive the P45? Does that form trigger a refund?

Thanks for any experience relayed.

[Jake]

I'll chip in a little with 2 points.
I have experience with reclaiming tax paid in the UK, although it wasn't for a pension, it was for severance payment. A bit complicated, I was contracted in the UK, but working outside. I "left" the company and received payment there, which was taxed. On a subsequent visit to the UK, I made a claim in a local tax office and was refunded the tax. I can't remember which form was filled in but I know it wasn't the one you mentioned which is for avoidance of double taxation. Actually that form is dated 2007, I did it in 2006.

It should be possible, but which form to use I don't know, this page maybe a good start https://www.gov.uk/claim-tax-refund
Then https://www.gov.uk/claim-tax-refund/y/a ... ive-abroad
You should end up here https://www.gov.uk/tax-uk-income-live-abroad

This comment [The country where you live might tax you on your UK income. If it has a ‘double-taxation agreement’ with the UK, you can claim tax relief in the UK to avoid being taxed twice.] suggests (to me) that this is to avoid paying in the UK, not sure if it's for reclaiming or not.

I'd recommend calling them, or mail, they helped me at the time.


So, what brought me here was your topic of the pension payment (thanks Google). I will in the near future be in the same position as you, where I will be able to receive pension payout in full or in lump sums in the UK. Now, my provider indicates that the money will be taxed like yours, but being a good citizen I should declare that payment here. That's where the form Japan-1-DT comes in, don't want to pay tax twice.
My understanding is: Fill in the form, get it certified at the local tax office in Japan, then send it to HMRC. From that point I shouldn't be taxed in the UK.
I will contact HMRC and my pension provider before tackling the local tax office here, it may take a little while but I'll update.

[RetireJapan]

That’s net of about 25% PAYE which I want to claim back. I assumed I could somehow send the P45 when I receive it from the company to the IR and claim it back as a non-resident. Then looking through gov.uk, I discovered the UK/Japan Double Taxation convention and the form ‘Japan-1-DT’ which you need to complete to avoid being taxed in both countries. So what should I do? Forget the money until/if I transfer it here? Claim from the IR directly? Submit the Japan-1-DT form as soon as I receive the P45? Does that form trigger a refund?

Sorry I'm a bit late to reply. Not sure about reclaiming UK tax, but from a Japanese perspective if you are permanently resident for tax purposes (not visa, this basically means you have lived in Japan for over five years) you would have to declare any income you receive worldwide. If you pay tax on it in the UK you could then deduct that from taxes owed in Japan. It's sadly not the case that if you pay (any) tax in the UK, you are then free from (all) tax in Japan.

[Jake]

I've contacted HMRC, but further digging produced this: https://assets.publishing.service.gov.u ... _notes.pdf

Reading that, it says in note : 2. Purpose of form Japan 1 DT
Form Japan 1 DT allows you to apply under the UK/Japan Double Taxation Convention for relief at source from UK Income Tax on pensions, purchased annuities, royalties and interest paid from sources in the UK. If pension, interest or royalty payments have been made with UK Income Tax deducted, complete form Japan 1 DT to claim repayment of the UK tax deducted from income paid on or after 1 January 2007. For income paid before that date, complete form Japan/Individual.

So in my case apply for relief at source, in your case claim repayment for taxes paid already. Of course depending on your status in Japan, you may have to declare it here.

In the notes, Part C2 and Part D refer to taxes on pensions too

[Neil]

OK so thought I’d come back for completion. Here’s the procedure:

1) 18/9 sent the ‘Japan 1 DT’ form with Parts 2 & 3 of my P45 to the J tax office.

Got a phone call a few days later asking for a translation as they had no idea what I’d sent them (though in a later phone call they said they’d found a bilingual form but had never seen the English-only one I’d sent). Not an official translation - just to help them understand the form.

So on photocopies, my wife wrote a translation in red pen in these exact places:

Form Japan 1 DT
Page 1: kanji next to ‘Japan tax reference number’
Page 1: the complete box at the bottom (For use by the National Tax Agency in Japan)

Japan 1 DT Notes (downloaded from the same place as the form at gov.uk)
Page 1: next to parts 1 (Double taxation - being liable to pay tax in both countries), part 2 (purpose of form Japan 1 DT) and part 4 (Certificate of the form by the taxation authorities of Japan).

(For the notes, I just cut those parts out and photocopied them onto a new sheet so the translation could be written next to them.)

They also asked for (1) a copy of the (completed) Japan 1 DT form and (2) a stamped, self-addressed registered mail envelope.

Not sure I needed to send the P45. It doesn’t hold any details the J tax office would be interested in (and certainly not the tax figure). It probably just added to the confusion. In any case, a copy would have been OK. So to recap: completed form + a copy + translation + copy P45 parts 2&3 (?) + envelope.

2) 29/9 sent the translation, spare copy and registered sae to the tax office.

3) 13/10 Received the stamped form from the tax office.

For some reason, they’d kept the original and sent me the copy stamped. It didn’t matter in the end, but may be an idea to ask for the original stamped.

4) 16/10 Sent the stamped form and P45 (parts 2 & 3) to HMRC by registered mail.

5) 6/1 Received the cheque from HMRC.

6) 12/1 Posted the cheque with a paying-in slip and covering letter to my bank in the UK by registered mail.

7) 21/1 Cheque paid in to my account.

I'm keeping the money in the UK for now, so no idea about paying tax here. That's another post and I have zero involvement with our taxes...

[Jake]

I'm keeping the money in the UK for now, so no idea about paying tax here. That's another post and I have zero involvement with our taxes...

Thanks for updating, useful information. Only one point, how long have you been in Japan? If you are resident for tax purposes i.e. over 5 years, then you need to report it here.

I have taken some pension payments in the UK which so far is tax free so I don't need to contact HMRC yet, but I need to report it here though. An issue I have is my pension company will provide a P45 which covers the UK tax year, which isn't the same as the Japanese tax year. I have asked for a "payslip" with the date of actual payment, but they will only do that for taxed payments. I'll just provide a print out and hope NTA man accepts it.

[kuma]

Late to the party, but I found the Japan 1 DT Form troublesome... in that it was multi-paged and monolingual, yet required a stamp and signature from the Japanese tax office. I found that the Japan Tax Offices issue a certificate of tax residency for double tax treaty purposes which is very easy to obtain, bilingual, free of charge, and contains the tax office stamp and name of the official who certified it. On my Japan 1 DT form I referred HMRC to the enclosed certificate of tax residency, which they accepted. (I think it's a woeful design flaw of the form...)

The link to the application form/certificate is here:

https://www.nta.go.jp/taxes/shiraberu/t ... e/9210.htm
The name of the form is: 居住者証明書

I've posted about my experience here (but should have placed it in the tax section): viewtopic.php?f=2&t=1059
I'm still experiencing a long delay from HMRC.