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Where Taxpayers and Advisers Meet

Split pay

octopus
Posts:1
Joined:Tue Mar 07, 2017 1:00 pm
Split pay

Postby octopus » Tue Mar 07, 2017 1:06 pm

Good afternoon

I would appreciate any advice on a personal matter.

I am looking to be posted in Malaysia with my current employer.
I would like to keep my current UK employer pension but be paid the remainder of my salary in Malaysia. Is it possible to have a split pay where 30% of my income is paid through UK payroll and receives 100% pension tax relief as it all will be paid into my UK pension fund, and the remainder then paid in Malaysia and taxed at the Malaysia income tax rates?

AmanSood
Posts:216
Joined:Mon Jan 09, 2017 4:12 pm

Re: Split pay

Postby AmanSood » Wed Mar 08, 2017 10:09 am

Presumably whilst posted in Malaysia you will no longer be tax resident in the UK? If so, then you wouldn't be taxed on any of your employment income whilst working in Malaysia. The key consideration is whether Malaysia would give you relief for any contributions paid by you/your employer into your UK pension scheme. If the answer is yes then you don't need to operate a split pay arrangement. If no, then it's unlikely that a split pay arrangement would work as you would be Malaysian tax resident and they would look to tax contributions into your UK pension.

Have you been posted for a temporary period to Malaysia? If so, has your employer agreed to tax equalise you i.e. you would be no worse/no better off from a tax perspective as a result of your posting? If so, the Company should compensate you for any additional taxes arising on your pension contributions.
Advising on UK employment, expatriate and personal taxes
aman.sood@e-taxconsulting.com.
+44 (0) 207 846 0155


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