x Abu Dhabi, UAEWednesday 17 January 2018

Turkey still deemed safe so check your cancellation cover

On your side: Travel insurers cover cancellation because of unrest only if the government under which the insurer operates clearly states you should not travel to that destination.

My wife and I are due to go on holiday to Turkey in a few weeks, with a few days in Istanbul before travelling to some other cities. We have an annual travel insurance policy, but are concerned that the recent unrest in Turkey may mean we are not fully insured. Can you explain the implications of the problems and whether we are covered if we decide to cancel our trip? MC, Abu Dhabi

At the time of writing, the general advice is not to cancel trips to Turkey but simply to keep away from demonstrations in places such as Istanbul or Ankara that have not reached the other tourist destinations. Travel insurers cover cancellation because of unrest only if the government under which the insurer operates clearly states you should not travel to that destination. For example, there is clear guidance not to travel to Syria, but this is not the case with Turkey. If you have booked a package holiday deal and the area to which you are travelling is still deemed safe, the travel operator is under no obligation to refund your money or offer you an alternative destination if you want to cancel. There are some policies that do cover cancellation for civil unrest, although these tend to be more expensive and are less common. You should check the small print of your policy to see if it includes any cover for civil unrest or makes any reference to "travel disruption", as it seems that the biggest potential problem for tourists is the risk of missing flight connections because of travel delays in Turkey itself.

I have worked in a senior administrative role for a private school for two years and have decided not to renew my contract. I told my manager this some time ago and, at his request, gave them more than a month's notice of my decision, in writing, which coincided with the stated end date of my contract. The problem is that my company has said they have the right to seek compensation from me for resigning, although this is not the case and I will be working to the end of the two-year contract. They have also said that as I am not a teacher I am not entitled to a plane ticket back to Canada. In addition, they now say that due to my alleged resignation I am only entitled to a reduced gratuity payment. Can you tell me what the law says about this? MT, Abu Dhabi

While MT advised the employer that she did not wish to extend or renew her two-year limited contract, this is not the same as someone resigning. An employee is not obliged to extend a limited contract, but she gave them notice of her decision. As she will be completing the contract this does not count as resignation in the eyes of the law and no compensation will be payable in this case. It also means that she is still entitled to receive the full amount of end of service gratuity based on her final basic salary. MT was recruited from Canada for this role, so Article 131 of the UAE Labour Law applies and this says: "At the end of the contract, an employer shall sustain repatriation expenses of the employee to the place of recruitment or to any other place which the two parties had agreed upon. If the employee served with another employer after the termination of his contract, the new employer shall pay the costs of travel at the end of service." The Labour Law goes on to state "the expenses of the repatriation of the employee means the cost of his travel ticket as well as what the labour contract or the regulations of the establishment stipulate regarding the right of the employee to travel expenditure for the employee's family and the cost of shipping of his belongings." As MT will be leaving the UAE, the school must pay for her flight and appropriate expenses. If the school fails to comply, MT should raise a formal complaint with the Ministry of Labour.

I have heard non-resident UK nationals can continue contributing to existing UK stakeholder or personal pensions and receive basic tax rebates for up to five years - effectively a circa 20 per cent guaranteed return, so well worth doing. Please can you clarify the rules? PS, Dubai

Under current legislation if someone has an existing UK personal pension plan and they make contributions in the tax year they become UK non-resident for tax purposes, then they may continue making payments to the plan of up to £3,600 per annum for a maximum of five consecutive tax years. As all personal contributions to pension plans are made net of basic rate tax, the individual makes an actual payment of £2,880, which is credited to the plan as £3,600 (Dh20,400). The actual plan returns are not guaranteed, but this uplift in contributions, which applies whether the individual pays UK income tax or not, is generally considered worthwhile if part of a significant pension fund, or if further substantial contributions are to be made at a later date.


Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at keren@holbornassets.com