Uk Non-Domicile

[beau thai]

On 12/19/2020 at 12:22 PM, Surelynot said:

To become non-resident in the UK and avoid UK income tax I read that you must be tax resident somewhere else...ie Thailand.

 

Is that correct?

 

If so, what tax would I pay on my income here?

you are correct. You have to be tax resident somewhere. Famous case of a belgian airline pilot who claimed not to be in any country for 90 days so should be tax free. He was told he had to be resident somewhere and given his circumstances they fixed on Belgium. Nice try though!

[Oxx]

1 hour ago, beau thai said:

you are correct. You have to be tax resident somewhere.

 

More utter tosh.  It's perfectly possible not to be tax resident anywhere if you don't meet the requirements of any country.

 

You couldn't, for example, suddenly become tax resident in Thailand if you don't spend 180 days in a calendar year here, even if you have no other tax residency.
 

[partington]

On 12/19/2020 at 5:22 AM, Surelynot said:

To become non-resident in the UK and avoid UK income tax I read that you must be tax resident somewhere else...ie Thailand.

 

Is that correct?

 

If so, what tax would I pay on my income here?

Just to emphasise, as others already have: your UK tax residency is worked out on the basis of your length of stay in, and links to,  the UK. It has nothing whatever to do with whether you are considered a tax resident of another country.

 

As Oxx said, you can be a tax resident of nowhere, and what's more, it is also quite possible to be tax resident in more than one country at the same time, if you meet the criteria for both countries in any one year.

Edited December 21, 2020 by partington

[quake]

12 hours ago, beau thai said:

yep non res is easy but doesnt avoid iht which is my objective

Maybe give a few more details of what you need to achieve.

Do you still have an Estate in the uk ?

maybe you cant avoid IHT,  but maybe can insure against the IHT bill.

I believe there are some types of pension funds you can pay into that are not treated as part of the IHT pot.

 

You do know,  you can't take it with you . LOL.

 

 

Edited December 22, 2020 by quake

[beau thai]

3 hours ago, quake said:

Maybe give a few more details of what you need to achieve.

Do you still have an Estate in the uk ?

maybe you cant avoid IHT,  but maybe can insure against the IHT bill.

I believe there are some types of pension funds you can pay into that are not treated as part of the IHT pot.

 

You do know,  you can't take it with you . LOL.

 

 

my objective is to shed iht liability which will inevitably involve having zero assets in and ties to uk.

[beau thai]

11 hours ago, partington said:

Just to emphasise, as others already have: your UK tax residency is worked out on the basis of your length of stay in, and links to,  the UK. It has nothing whatever to do with whether you are considered a tax resident of another country.

 

As Oxx said, you can be a tax resident of nowhere, and what's more, it is also quite possible to be tax resident in more than one country at the same time, if you meet the criteria for both countries in any one year.

Its my clear understanding that it is impossible not to be tax resident somewhere. If I am wrong I would love to see links to the evidence of how this is achieved. I am sure if it is possible many would like to do just that! Being tax resident of more than one country is where  am now

[beau thai]

14 hours ago, Oxx said:

 

More utter tosh.  It's perfectly possible not to be tax resident anywhere if you don't meet the requirements of any country.

 

You couldn't, for example, suddenly become tax resident in Thailand if you don't spend 180 days in a calendar year here, even if you have no other tax residency.
 

Great. Please teach me how to be tax resident nowhere.Brilliant idea.

[quake]

1 hour ago, beau thai said:

my objective is to shed iht liability which will inevitably involve having zero assets in and ties to uk.

Sounds like that's the first job, zero assets.

This maybe be of interest to you. QNUPS

 

https://www.iexpats.com/qnups/

 

Edited December 22, 2020 by quake

[Surelynot]

1 minute ago, quake said:

Sounds like that's the first job, 

This maybe be of interest to you. QNUPS

https://www.iexpats.com/qnups/

Friend of mine claims to have done this in Cyprus....now pays 10% on his UK company pension.

[quake]

Just now, Surelynot said:

Friend of mine claims to have done this in Cyprus....now pays 10% on his UK company pension.

 it could be a way to dump a load of money out of reach of hector.

[beau thai]

47 minutes ago, quake said:

Sounds like that's the first job, zero assets.

This maybe be of interest to you. QNUPS

 

https://www.iexpats.com/qnups/

 

thanks i will check that out. my objective is still non-dom

[beau thai]

1 minute ago, beau thai said:

thanks i will check that out. my objective is still non-dom

Nope doesnt help me but may help others. I have non transferable 'final salary' corporate pensions and other stock market investments which dont qualify.

What I really need to track down is a firm or trustworthy competent advisers who have achieved uk non dom status for other uk citizens, so know the ropes, what is possible and how to achieve it. Very hard to find.

[Oxx]

13 minutes ago, beau thai said:

What I really need to track down is a firm or trustworthy competent advisers who have achieved uk non dom status for other uk citizens, so know the ropes, what is possible and how to achieve it

 

Sterling Financial (a UK IFA) has experience in this area.  I've attached their pamphlet on Domicile.  However, you will see (and as I've stated before) HMRC will not say whether you've done enough to be non-domiciled until after you've died.  You can spend a small fortune on a QC's opinion, but this can be rendered invalid by any changes in your circumstances.

 

Sterling Financial will give initial advice by 'phone or in person in Bangkok for free.

 

 

UK DOMICILE info sheet.pdf

[beau thai]

3 hours ago, Oxx said:

 

Sterling Financial (a UK IFA) has experience in this area.  I've attached their pamphlet on Domicile.  However, you will see (and as I've stated before) HMRC will not say whether you've done enough to be non-domiciled until after you've died.  You can spend a small fortune on a QC's opinion, but this can be rendered invalid by any changes in your circumstances.

 

Sterling Financial will give initial advice by 'phone or in person in Bangkok for free.

 

 

UK DOMICILE info sheet.pdf 58.57 kB · 1 download

thank you. whilst hmrc will never confirm a hypothetical question so you are quite correct that it can never be finally confirmed until you are past caring, you can improve the odds of success by enough to make it worthwhile. As compared with your heirs losing 40% -  above the thresholds

[PGSan]

On 12/19/2020 at 12:22 PM, Surelynot said:

To become non-resident in the UK and avoid UK income tax I read that you must be tax resident somewhere else...ie Thailand.

 

Is that correct?

 

If so, what tax would I pay on my income here?

As far as I can tell, for a UK citizen to avoid liability on income generated in the UK is very difficult whatever your residency position.  Maybe that is why it is best for the rich to become non-doms? 

Edited December 25, 2020 by PGSan

[PGSan]

On 12/19/2020 at 1:27 PM, quake said:

over that you pay at 20% on uk income.

Unless, like me, you pay in higher tax brackets such as 40% !

[PGSan]

On 12/20/2020 at 7:43 PM, lungbing said:

No, your UK state pension is not free of income tax, it is just paid to you without tax being stopped.  But it counts towards your total taxable income.

Agreed, this is a very important point.  In my cases, having state pension of over £12,500pa, some of it has to be collected by PAYE on other income (as does the 40% and higher rates) .

[CharlieH]

Reported flame post removed.

[salavan]

On 12/19/2020 at 3:18 PM, Almudena said:

Or bung £20K into a tax free ISA account each year and pay sod all. 

You can't pay into an isa if your non resident it's illegal 

[Almudena]

2 hours ago, salavan said:

You can't pay into an isa if your non resident it's illegal 

I've never gave up or intend to give up my UK residency.  I always go back once a year to see friends and enjoy the British summer.

[Peter Denis]

30 minutes ago, Almudena said:

I've never gave up or intend to give up my UK residency.  I always go back once a year to see friends and enjoy the British summer.

Then applying for the Non Imm O-A Visa at the UK Thai Embassy once every year (or every 2nd year) while you are there, would be a worthwhile option for you to stay in Thailand IO hassle-free (no need to visit an Imm office during those 2 years, nor the need park/transfer funds to a Thai personal bank account to meet immigration requirements).

[partington]

4 hours ago, Almudena said:

I've never gave up or intend to give up my UK residency.  I always go back once a year to see friends and enjoy the British summer.

Unfortunately it isn't up to you to decide - UK residency is determined by a set of externally applied rules, and if you do not meet these residency rules you are non-resident despite any wishes or declarations you think you've made...

 

Going back once a year, if the only basis, does not sound like you would qualify as resident. You can look up the residency rules on the uk.gov site.

Edited December 26, 2020 by partington

[Almudena]

43 minutes ago, partington said:

Unfortunately it isn't up to you to decide - UK residency is determined by a set of externally applied rules, and if you do not meet these residency rules you are non-resident despite any wishes or declarations you think you've made...

 

Going back once a year, if the only basis, does not sound like you would qualify as resident. You can look up the residency rules on the uk.gov site.

Going back for 3 months of the year qualifies. 

[partington]

38 minutes ago, Almudena said:

Going back for 3 months of the year qualifies. 

Not by itself - need other qualifications too.  Don't take my word for it though, have a look

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

Edited December 26, 2020 by partington

[Almudena]

21 minutes ago, partington said:

Not by itself - need other qualifications too.  Don't take my word for it though, have a look

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

You’re automatically a UK resident if your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year.   - That qualifies me.

[partington]

Fair enough -  I'd be really interested to know how  you live in Thailand without a home?

[Peter Denis]

6 hours ago, partington said:

Fair enough -  I'd be really interested to know how  you live in Thailand without a home?

Easy, when the place where he is staying is on the name of his wife/girlfriend.

Even if he would have a condo or house on his own name here in Thailand, how would UK authorities ever know about this when you do not inform them about it?

[treetops]

4 hours ago, Peter Denis said:

Easy, when the place where he is staying is on the name of his wife/girlfriend.

 

You don't have to own a place for it to be your home.

[partington]

14 hours ago, Peter Denis said:

Easy, when the place where he is staying is on the name of his wife/girlfriend.

Even if he would have a condo or house on his own name here in Thailand, how would UK authorities ever know about this when you do not inform them about it?

 

 

These are two separate questions.

1. HMRC are extremely unlikely to ever know about it unless a specific tax question arises and some kind of investigation occurs. In this case living in Thailand nine months a year will immediately suggest the person has a home abroad. This will almost never happen unless the broker/keeper of the ISA begins to suspect foreign residency.

 

2. As pointed out by treetops above, there is no question at all of having to OWN (or even rent),  a property abroad for you to be considered as having a home there.  The HMRC guidelines on defining a home (HMRC guides RDRM 13020 to 13060 etc   https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm13060)  are extremely clear. It is anywhere where you normally live eat and sleep , whoever it belongs to, as following extract from the link above shows:

 

"A building, vehicle, vessel or structure, or the like, can be an individual’s home even if it is not owned by them. Ownership or a legal form of tenancy makes no difference. For example, a property that an individual rents or in which an individual lives with their parents, another family member or others, will be a home if they use it as their home."

 

 

Edited December 27, 2020 by partington

[Almudena]

Regarding the ISAs.  If you become a non British resident, you are allowed to keep your ISA accounts (if opened before departing the UK).  However you won't be allowed to add anymore external money to the account.