Overseas retirees "not optimistic" about resolution to tax woes

Wednesday 26 September 2018

“Vulnerable” overseas retirees being charged the top 20% rate of tax say they have little faith that the new Treasury Minister will resolve the issue they say has “severely affected their standard of living.”

The comments came after Treasury Minister Deputy Susie Pinel asserted yesterday that only a “very small number” of just 20 to 30 non-resident pensioners “live in jurisdictions where they are legally unable to gain relief against local taxes for taxes paid in Jersey in respect of Jersey-source income.”

But she has been accused of “fudging and muddying” by islanders abroad who are campaigning to have their marginal relief reinstated after it was removed in the 2016 Budget to help the island make an additional £500,000 a year.

Former BBC broadcaster Roger Bara, who now lives in Cyprus and has previously been vocal on the issue, commented: “[The Minister] is aware that this is not, and never has been, the issue. It is simply about giving back to low-income expats living abroad their marginal relief, cruelly taken away in 2016, which has severely affected their standard of living. 

“She also knows that this change in the tax law was intended to target wealthy property owners and companies, not pensioners and other low income people, who simply became the unintended victims.”

Pictured: Ex-BBC Radio Jersey broadcaster Roger Bara said that the removal of marginal relief for pensioners living abroad "severely affected" the quality of life of those affected.

Those comments were echoed by the Portugal-based Howard* family, who said they were “not optimistic” that their marginal relief would be reinstated.

The pair, who lose an additional £4,000 per year under the system, also felt that the mention of “reliefs” – relating to Double Taxation Agreements (DTAs) – was a red herring, and were concerned that the Minister and Comptroller for Taxes were more focused on their “collection of taxes” than helping struggling overseas residents. 

They said it seems “[the Comptroller] is happy to overcharge the poor pensioners and deflect their complaints to other jurisdictions, saying you can claim it back there.”

“What he fails to realise is that, whether there is a DTA or not, those seriously affected overseas resident pensioners don't earn enough to pay tax in their new country of residence anyway, so any credit is completely worthless. Not one of our group has ever mentioned that they aren't getting double tax relief. It is not the issue we are fighting for, but an easy way out for the States to deflect the blame elsewhere.”

Another islander based in Murcia, Spain, with his wife said that he was unimpressed by the number of taxpayers the Minister assessed to be affected.

“I am sure there are more than 20 or 30 non-resident tax payers involved. Every one of the 20 or 30 tax payers will probably have wives or other dependants so that number can easily be doubled in relation to persons affected.”

Pictured: The Treasury Minister, Deputy Susie Pinel, says that the 2019 Budget is likely to contain some "reliefs".

Explaining the real impact of having marginal relief reinstated, the islander, who is due to have a serious knee operation, added: “This will cost me between €3,500 to €4,000 of my savings. The marginal relief being reinstated and even backdated would be of great assistance. I now have a few months of recovery and physiotherapy, more cost, in front of me... All other non-residents affected have served the Island in some capacity and should be able to enjoy their hard-earned pension plus benefits.”

Deputy Pinel has pledged to include some “targeted reliefs to address some of the concerns raised” in her next Budget, which will be released on 8 October.

“Whatever she decides, this campaign to have marginal relief reinstated will continue unabated, with plenty of support pledged by many States members,” Mr Bara added. 

Another former Jersey resident, who lives in Spain with her husband, simply chipped in: “We’re holding our breath and hoping for the best!”

*Names changed to protect anonymity.