Uk Tax Allowance For Thai Wife

[DavidOxon]

Hi there guys and gals . . . me again! (sorry!)

Trying to get my little head around all the 'stuff'

that's to be done before departing for LOS . . .

Does any one know (I've checked the archives!) If Thai wife (lives and works and pays tax in UK now with NI number)

will be eligible for a UK tax free allowance when we move to Thailand?

From my gleanings . . . I will be liable for tax on income from rent of UK property

and also from interest on UK savings (dam_n!) but can still use my £5k tax free allowance.

Can we use Thai wife's allowance or will she not be entitled to one?

Part 2 of my gleanings would seem to indicate that money paid in the UK from work

done outside the UK while not resident in the UK and living in LOS is not liable for UK tax, but liable to Thai income tax

if brought into Thailand in the same year that it is earned.

Thanks for reading . . . such a boring subject, I know!

David

[Expat2B]

Hi there guys and gals . . . me again! (sorry!)

Trying to get my little head around all the 'stuff'

that's to be done before departing for LOS . . .

Does any one know (I've checked the archives!) If Thai wife (lives and works and pays tax in UK now with NI number)

will be eligible for a UK tax free allowance when we move to Thailand?

From my gleanings . . . I will be liable for tax on income from rent of UK property

and also from interest on UK savings (dam_n!) but can still use my £5k tax free allowance.

Can we use Thai wife's allowance or will she not be entitled to one?

Part 2 of my gleanings would seem to indicate that money paid in the UK from work

done outside the UK while not resident in the UK and living in LOS is not liable for UK tax, but liable to Thai income tax

if brought into Thailand in the same year that it is earned.

Thanks for reading . . . such a boring subject, I know!

David

I am not sure of the situation regarding the retention of the UK tax allowance by your wife, is she also a British Citizen? If so her treatment might be expected to be similar to yours. See here for more information http://www.hmrc.gov.uk/cnr/allow_nonres.htm

However, you would appear to be much better off transferring your banking arrangements offshore rather than retaining them within the UK. All major UK banks have operations in Jersey and the IoM which typically service UK ExPats. Moving your account offshore in this way gives you all the comfort of a keeping similar UK banking arrangements in Sterling, but without the possible tax complications of remitting income to the UK. I would see this as a simple and relatively painless move.

The UK has a withholding tax levied on the proceeds of property rental for non UK residents, however you are only liable for tax after deduction of all relevant expenses for the rental property including mortgage interest payments, rental agent fees, management fees (if applicable) which include all service charges for a leasehold property (IIRC) but not the ground rent, maintenance costs, depreciaton of fixtures and fittings etc.

It is not too difficult (if you have a reasonably large mortgage) to construct a scenario where you make little real profit and thus the tax due on letting income is minimised. Clearly if you have a large portfolio of rental properties your position might be rather different.

Edited November 16, 2007 by Expat2B

[GuestHouse]

If your wife is registered as joint account holder and joint property holder + joint contract signatory to the lease agreements then she has wealth and income domiciled in the UK (regardless of her nationality/imigration status and eye colour).

So she would be entitled to claim half the profits and against those claim a tax allowance.

Speak to a tax advisor.

[DavidOxon]

Thanks guys . . . .

Rent minus Mortgage and costs is less than my personal allowance . . .

So if savings go offshore then it's no longer a problem.

Thanks

David

[Expat2B]

Thanks guys . . . .

Rent minus Mortgage and costs is less than my personal allowance . . .

So if savings go offshore then it's no longer a problem.

Thanks

David

Just be very clear that the full amount of mortgage is not deductable, only the interest element of the mortgage can be offset against the rental "profit". Any capital repayment will count as "profit" for tax purposes. This is an easy calculation if you have an interest only mortgage, but somewhat harder if you have a repayment mortgage (that said your bank/building society should advise you of the relevant split in your annual statement).

[DavidOxon]

Thanks for that . . . it is interest only.