A former satellite executive has fought off an attempt by the British taxman to seize almost £3 million from his pension.
But his dreams of retiring to the UAE with a £6m lump sum have been dashed in the process.
Ramin Khadem, 75, retired to the UAE to be near his daughter in 2018 after working for decades as a chief finance officer for telecom and satellite infrastructure firm Inmarsat in London.
As he approached his mid-70s, and his wife approached her retirement, they discussed where they should live. Their three adult children each have families and resided in Canada, UAE and London.
The couple decided to move to the UAE, where Mr Khadem's wife would join him when she retired from her roles as a consultant at London's Great Ormond Street Hospital and as a professor at University College London.
Before leaving the UK, Mr Khadem's company pension trust signed an agreement to give him his £6 million ($8m) pension as a lump sum as he was due to become a UAE resident, believing it would not be liable to tax.
However, when he returned to the UK in March 2020 to visit his wife, he ended up stranded there as borders closed in response to the pandemic.
It led to the UK's tax authority, HMRC, seeking for Mr Khadem to pay 45 per cent tax, plus interest on the tax, on the £6m lump sum as he was no longer a permanent UAE resident.
When he and the pension trust investigated the issue, they discovered the advice they had received in making the agreement to pay a lump sum had been incorrect, London's High Court heard.
The mistake related to the timing of his application for a tax-domicile certificate and the payment of the lump sum.
JTC Employer Solution Trustees brought a case on behalf of the Inmarsat Employment Company Pension Plan to see the agreement cancelled and to retrieve the £6m.
Judge Jarman said the mistake was of “sufficient gravity” that it needed to be corrected and upheld the firm’s application.
“I consider that the agreement was entered into because of the mistake, which was a causative mistake of sufficient gravity, and which it would be unconscionable to leave uncorrected,” he said.
“The claimant is entitled to the relief that it seeks.”
HMRC had asked the court not to withdraw the agreement.
But the company claimed that had it received the correct advice it would not have paid the lump sum and would have instead made a gradual series of payments – not all of which would have been taxable in the UK.
“[It meant] that a large charge to UK tax, in the region of 45 per cent, arose on the sum which is the subject of the agreement,” the judge said.
“It is the claimant's case that had it not made a mistake of fact as to the practice of the UAE in issuing the certificate, it would not have entered into the agreement, but instead would have made some other arrangement.
“One option would have been to make pension payments to Mr Khadem over a 10-year period, leading to less tax being paid depending on his circumstances, or at least to the deferral of the payment of tax, which deferral in itself is of value.
“In my judgment these factors are such as to make it unconscionable for the mistake to remain uncorrected. It may be that the difference will be limited to interest on the underlying tax. That in itself would be significant.
“However, there is a realistic possibility that the difference will be significantly more than that, depending on Mr Khadem's circumstances.
“Setting aside the agreement will not lead to his avoiding paying any UK tax which is due from him on payments from the plan made to him while he is resident in the UK.”
HMRC claimed the situation was a “consequence of the temporary residence rules rather than an unfairness which needs correcting by the court”.
Iranian-born Mr Khadem, who has chaired the International Space University, told the court that following the pandemic it is “not likely” he will leave the UK in the near future.
He is now entitled to his pension in a series of payments, instead of being liable to paying 45 per cent tax, including interest on the tax, on the full £6m lump sum.
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THE DETAILS
Solo: A Star Wars Story
Director: Ron Howard
2/5
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
The view from The National
The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
Types of policy
Term life insurance: this is the cheapest and most-popular form of life cover. You pay a regular monthly premium for a pre-agreed period, typically anything between five and 25 years, or possibly longer. If you die within that time, the policy will pay a cash lump sum, which is typically tax-free even outside the UAE. If you die after the policy ends, you do not get anything in return. There is no cash-in value at any time. Once you stop paying premiums, cover stops.
Whole-of-life insurance: as its name suggests, this type of life cover is designed to run for the rest of your life. You pay regular monthly premiums and in return, get a guaranteed cash lump sum whenever you die. As a result, premiums are typically much higher than one term life insurance, although they do not usually increase with age. In some cases, you have to keep up premiums for as long as you live, although there may be a cut-off period, say, at age 80 but it can go as high as 95. There are penalties if you don’t last the course and you may get a lot less than you paid in.
Critical illness cover: this pays a cash lump sum if you suffer from a serious illness such as cancer, heart disease or stroke. Some policies cover as many as 50 different illnesses, although cancer triggers by far the most claims. The payout is designed to cover major financial responsibilities such as a mortgage or children’s education fees if you fall ill and are unable to work. It is cost effective to combine it with life insurance, with the policy paying out once if you either die or suffer a serious illness.
Income protection: this pays a replacement income if you fall ill and are unable to continue working. On the best policies, this will continue either until you recover, or reach retirement age. Unlike critical illness cover, policies will typically pay out for stress and musculoskeletal problems such as back trouble.
Match info
Arsenal 0
Manchester City 2
Sterling (14'), Bernardo Silva (64')
Boulder shooting victims
• Denny Strong, 20
• Neven Stanisic, 23
• Rikki Olds, 25
• Tralona Bartkowiak, 49
• Suzanne Fountain, 59
• Teri Leiker, 51
• Eric Talley, 51
• Kevin Mahoney, 61
• Lynn Murray, 62
• Jody Waters, 65
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Results
5pm: Handicap (PA) Dh80,000 (Turf) 1,600m; Winner: Nadhra, Fabrice Veron (jockey), Eric Lemartinel (trainer)
5.30pm: Maiden (PA) Dh80,000 (T) 1,400m; Winner: AF Dars, Tadhg O’Shea, Ernst Oertel
6pm: Handicap (PA) Dh80,000 (T) 1,400m; Winner: AF Musannef, Tadhg O’Shea, Ernst Oertel
6.30pm: Handicap (PA) Dh80,000 (T) 1,200m; Winner: AF Taghzel, Malin Holmberg, Ernst Oertel
7pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 2,200m; Winner: M’Y Yaromoon, Khalifa Al Neyadi, Jesus Rosales
7.30pm: Handicap (TB) Dh100,000 (PA) 1,400m; Winner: Hakeem, Jim Crowley, Ali Rashid Al Raihe
The specs: 2018 Nissan Patrol Nismo
Price: base / as tested: Dh382,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 428hp @ 5,800rpm
Torque: 560Nm @ 3,600rpm
Fuel economy, combined: 12.7L / 100km
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Killing of Qassem Suleimani
Killing of Qassem Suleimani
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Medicus AI
Started: 2016
Founder(s): Dr Baher Al Hakim, Dr Nadine Nehme and Makram Saleh
Based: Vienna, Austria; started in Dubai
Sector: Health Tech
Staff: 119
Funding: €7.7 million (Dh31m)
Race 3
Produced: Salman Khan Films and Tips Films
Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
Rating: 2.5 stars
Zayed Sustainability Prize
High profile Al Shabab attacks
- 2010: A restaurant attack in Kampala Uganda kills 74 people watching a Fifa World Cup final football match.
- 2013: The Westgate shopping mall attack, 62 civilians, five Kenyan soldiers and four gunmen are killed.
- 2014: A series of bombings and shootings across Kenya sees scores of civilians killed.
- 2015: Four gunmen attack Garissa University College in northeastern Kenya and take over 700 students hostage, killing those who identified as Christian; 148 die and 79 more are injured.
- 2016: An attack on a Kenyan military base in El Adde Somalia kills 180 soldiers.
- 2017: A suicide truck bombing outside the Safari Hotel in Mogadishu kills 587 people and destroys several city blocks, making it the deadliest attack by the group and the worst in Somalia’s history.
Tightening the screw on rogue recruiters
The UAE overhauled the procedure to recruit housemaids and domestic workers with a law in 2017 to protect low-income labour from being exploited.
Only recruitment companies authorised by the government are permitted as part of Tadbeer, a network of labour ministry-regulated centres.
A contract must be drawn up for domestic workers, the wages and job offer clearly stating the nature of work.
The contract stating the wages, work entailed and accommodation must be sent to the employee in their home country before they depart for the UAE.
The contract will be signed by the employer and employee when the domestic worker arrives in the UAE.
Only recruitment agencies registered with the ministry can undertake recruitment and employment applications for domestic workers.
Penalties for illegal recruitment in the UAE include fines of up to Dh100,000 and imprisonment
But agents not authorised by the government sidestep the law by illegally getting women into the country on visit visas.
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
