On Your Side: UK pensions over Dh43,330 a year are subject to tax

Plus questions about clarifying the new national ID card deadlines, a Bank of Baroda transaction that is ongoing and an unexpected tax bill for a UK expatriate, answered by The National's consumer advocate.

My husband receives a regular pension income in the UK, which is being taxed. If he was to get it paid into an offshore account, would it still be subject to tax? We are not UK residents and won't be returning for several years. AP, Al Ain

If your husband is already receiving a pension, it is deemed to be income from the UK and is subject to tax at source, according to HM Revenue & Customs. This is despite the fact that he is a non-resident for tax purposes. Having the pension paid to an offshore account will not make a difference. Bear in mind, however, that he has a personal income allowance of £7,475 (Dh43,330) in the current tax year, so any income below that amount is not taxable.

Personal Finance On Your Side

The National's consumer advocate, Keren Bobker, answers your questions on legal and financial matters in the UAE and beyond.

I have been trying to follow the various announcements in regard to obtaining an Emirates ID card, but the rules seem to keep changing. I have a three-year residency visa that was renewed in December 2010. I initially understood that I didn't have to get an ID card until the next renewal date of my visa, at which point the two requirements would be dealt with together. A few weeks ago, I read that I had to get one straight away. Then, last week, I read there was a new deadline of October, although some people are stating other dates. I am confused, especially because I've heard that the centres that issue them have no spare appointments. Can you tell me how this applies to me as an expatriate? I don't know if I have to act now, am already being fined or if I have time to get this sorted to avoid being fined. HM, Abu Dhabi

The latest guidance from the Emirates Identity Authority (EIDA), issued earlier this month, has clarified the latest dates by which everyone should have registered for an ID card. The dates vary depending on which emirate has issued your residency visa, which could be different to the emirate you actually live in. All Emiratis must be enrolled by October 31. Children under 15, both Emirati and expatriate, have been exempted from paying a late fee until October 1, 2012. Expatriates are expected to apply for their ID cards by the following dates: all residents of the Northern Emirates (Fujairah, Ras Al Khaimah, Umm Al Qaiwain and Ajman) December 1; Sharjah February 1, 2012; Abu Dhabi April 1, 2012; and Dubai June 1, 2012. These dates apply to those whose residency visas expire after the relevant dates. However, anyone who renews a visa after December 31 and does not have an ID card will also be subject to a fine, termed a "late fee" by EIDA. All cardholders have a 30-day period in which they should renew their card. Any changes to circumstances must also be reported within 30 days. The late fee is Dh20 per day, up to a maximum of Dh1,000. I suspect there will be last-minute rushes as each deadline approaches, so it would be sensible to apply sooner rather than later.

I am facing an issue with Bank of Baroda. I deposited a cheque from my company into my personal account. Because both accounts are with Bank of Baroda, the cheque proceeds are transferred almost immediately. For some reason, the bank didn't have my specimen signature on hand, so it bounced the cheque. Because of this, my rent cheque (which was issued from my personal account and had the same signature) was bounced, which caused me a great deal of embarrassment and could potentially have caused great difficulty. The bank is now saying that it does not have a complete signature record, but won't tell me how to resolve this to prevent it from happening again. Can you help? BSM, Dubai

I have tried for several weeks to contact Bank of Baroda by both e-mail and telephone, but it has not replied. If a representative of the bank would like to contact me, I would be happy to hear from them.

I am a resident of the UAE and have remained outside of the UK for well under the 90-day non-resident rule during the 2010-2011 tax year. I have been sent a tax return, which I completed. I have also sent £17,000 (Dh98,744) to my UK bank account, which I declared in the return. HM Revenue & Customs (HMRC) has now sent me a tax demand for £3,200, but I am considering appealing against this because I believed that my overseas income was tax-free. Is the £17,000 I sent home liable for tax, or should it be exempt? KD, Dubai

If you have spent fewer than 90 days in the UK between April 6, 2010, and April 5, 2011, you are considered a non-resident for tax purposes and your overseas income will not be subject to income tax. You should have notified HMRC of your intention to become a non-resident by completing and returning form P85. If you are registered as a UK non-resident for tax purposes, your overseas income may be remitted to the UK without liability, so there should be no tax to pay on the monies you have sent back. Any income arising in the UK, such as rental income or interest on savings, remains liable for tax, although you retain a personal allowance of £7,475 in the current tax year. UK income up to this level is not taxable.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Write to her at [e-mail] with queries for this column or for advice on any other financial planning matter.