Retirees living abroad angered by 20% tax rate
ANGER is growing among low-earning Islanders who have retired abroad and are losing thousands of pounds of income every year after being stripped of tax breaks on their pensions.
The JEP has been contacted by a number of disgruntled expatriates who were shocked to be charged 20 per cent rate tax on the money they accumulated through decades of work in the Island, after in many cases previously paying nothing.
A new regime was introduced in 2016 which saw the ‘marginal relief’ exemption threshold and allowances scrapped for the private pensions of retirees living abroad. The move was aimed at bringing in more money from rich retirees.
But the changes – which it has been claimed could be affecting hundreds of people – have meant that pensioners on low incomes are now being taxed under the ‘20 means 20’ regime, which normally only applies to the highest earners and has few relief entitlements and no personal allowance threshold.
Bob Dale, who worked for Jersey Post for 20 years and retired to the Canary Islands ten years ago, said that he had lost a fifth of his private pension income after the new rules were applied.
He said that it was ‘despicable’ how pensioners were now being punished by Jersey’s tax authorities.
‘I wouldn’t be able to afford to live in Jersey these days, but if I did I wouldn’t be paying any tax at all because I would be below the income threshold,’ he said.
‘But they took away the marginal relief and from 2016 I ended up paying about £2,000 a year. It has had a definite impact of my lifestyle.’
He added: ‘I can’t believe that they would do this to people who are in their twilight years and have worked hard and contributed all their life.
‘Now I am contributing and I am getting nothing back for it. No one from Jersey is going to come over here and fix the hole in the road outside my house.
‘If they made the decision to do this, then they can reverse it. And when they do I want my money back for the past few years.’
Meanwhile, Jerseyman Andre Ferrari, who retired to northern Italy two years ago, said that his partner, Francis Newall, had also been stung by the regime.
He said that Francis had worked at Highlands College for 18 years and is now being taxed 20 per cent on his pension.
‘We contacted the Taxes Office to ask for an explanation and it was not very satisfactory. They gave us a very curt response and just said that we would have to pay it,’ said Mr Ferrari.
‘They clearly haven’t thought these changes through. I would like to know how many people are being affected by this – it could be everyone from Jersey who has retired overseas.’
He added that he thought it was unfair to tax overseas pensioners who have no political representation in Jersey.
Former musician and radio presenter Roger Bara, who has retired to north Cyprus, has formed a Facebook group called the Jersey Ex-pats Association to lobby the government on the matter.
‘I do not believe that the intention was to target low income pensioners with the change but that is what has happened,’ he said.
‘What we would like to see is some sort of allowance introduced for the 500 or so overseas retirees who have been affected by this.’
It is understood that Chief Minister Ian Gorst has ordered an investigation of the matter.