Paying Tax On Uk Savings?

[thai3]

Like a lot of people living here I still keep a UK address but live in Thailand all year round. What is likely to happen if I do not continue to pay tax on UK savings as a non resident? Am I right in thinking that Nationwide will stop deducting tax as instructed, but are then likely to cancel my ATM flex account as having that is dependent upon being resident in the UK, or do they just ignore the non residence rule in practice?

[briley]

If you are genuinely non-resident in the UK for tax purposes then the UK authorities will only tax you on your UK earnings.

If you have pension, savings and other income of less than the tax free allowance (forget how much, £6,475 if under 65?, someone will correct me) then you can fill in a form with nationwide to get your interest paid tax free.

BUT

I have always found banks and building socs do not like you to be non-resident and do make it difficult to fill that form. You can fill in the simple form R85 asking for the interest to be paid tax free. I believe you are supposed to be UK resident to use the form but the actual form you give to nationwide does not say that.

Otherwise inland revenue have a simple form to claim the tax back.

[chiang mai]

And my experience is that UK banks and building societies are quite happy to have you complete IR85, fact is they really don't care about this aspect since there are many legitimate reasons why a person might need to complete that form. There is a separate form that an expat should complete if they are non-resident for tax purposes (sorry I don't know the ID of the form offhand) and that is the one that the Revenue requires expats to submit - I have found banks and building societies equally nonplussed about this form also.

I've been non-resident for many years but when I was in the UK on holiday last September I did a quick tour of UK financial institutions looking for good onshore deposit deals. In every case I told the branch manager that I could provide documentation showing I was either resident or non-resident and I was told it was up to me which way I wanted to go on this subject, they simply didn't care. (Note: I have two bank accounts using a UK address where statements are sent to a UK address, plus, I have other accounts where the statements are sent to my Thai address, hence I can be either resident or non-resident. When I opened a new onshore account with A & L they ran my onshore details through their credit check system which confirmed my UK details and the onshore account was accepted). It's all a lot easier on this front than some people have reported in the past.

Edited February 6, 2010 by chiang mai

[JAS21]

If it helps…I am registered, with HRMC, as ‘Non Resident’ and ‘Not Normally Resident’. I pay UK tax on everything earned in the UK..eg pension and house rentals.

I can use an offshore savings bank eg Isle of Mann and not be taxed on the interest.

I have a Nationwide Flex Account and ATM card with the registered address here in Thailand, statements/letters etc from them come here.

I use my sons address in the UK if I need one. Being NR and NNR has its pros and cons, but at least I will not be in for any nasty surprises..I hope!

[Morden]

It seems that a drawback of being non-resident is that the Sate pension is fixed at whatever the amount at the time one becomes recognised by the pensions authority as non resident. In other words, no more increases. Some people have tried to get around this by not declaring their status but that is fraud and, apparently, frowned on when the crime is discovered.

Getting the facts about how non resident status affects our rights is very difficult. Neither government agencies nor banks are forthcoming on the subject and I don't like merely to accept the off the cuff response of some junior call centre operator. I have found no tax or other professional who is willing to give advice, presumably because there is no money in it for them. Joan Bakewell has set herself up as a champion of the pensioner but has not yet replied to my email asking whether her activities take into account the needs of non resident pensioners.

This thread could be a very useful opportunity for those who know about or have experiences of the issues affecting British non residents, including pensioners, to inform others. Also, if anyone has found a source of independent professional advice that these people can consult before admitting their status I for one would like to know about it.

[briley]

It is not difficult to find out all the 'rules' governing resident and non-resident (and non-domiciled) in the UK. All the information you need can be obtain from the UK government web sites. A little spread out and it does take time, but the effort can be worth while.

An adviser, the right one, can tell you the rules - for a fee. But there is little in it for them hence the need for a fee.

I always think the biggest confusion people have is thinking that rules for one thing apply to another.

Rules about non-resident for tax are not the same as for pensions and are not the same as for the health service. You can be resident for some reasons and not resident for others.

(As a humorous aside - As a simple rule of thumb, if it means collecting money from you by HMG you are resident, if it means HMG giving you money you are non-resident. )

If most of your income is UK derived then remaining UK resident (if possible) is normally a benefit.

If most of your income is non-UK derived then becoming non-resident (if possible) is normally a benefit.

Moving savings offshore and becoming non-resident to save tax is normally not worth while as offshore interest rates are often lower than UK rates - by about the rate of tax. Unless you need the regular income a UK resident is better off using a fund that does not pay interest but makes capital gains, then you can utilize your capital gains allowance every few years (or every year if you are that rich). A married couple under 65 (with a bit of care) can 'earn' up to £33,000 and pay no tax. Over 65 and you can go up to about £40,000 a year and pay no tax.

But what I say generally applies to those with normal incomes and savings - not the rich! They should use advisers and pay the fees.

PS I take no responsibility for any of the above being correct and the advice is worth what you paid.

[Morden]

Thanks Brily.

That's more complicated that I thought. You also raise the matter of entitlement to use the NHS; something that can also be a problem for expatriates.

You suggest which is better in certain circumstances. The decision regarding residency is with the government authorities, I believe. Am I wring?

[thai3]

If it helps…I am registered, with HRMC, as ‘Non Resident’ and ‘Not Normally Resident’. I pay UK tax on everything earned in the UK..eg pension and house rentals.

I can use an offshore savings bank eg Isle of Mann and not be taxed on the interest.

I have a Nationwide Flex Account and ATM card with the registered address here in Thailand, statements/letters etc from them come here.

I use my sons address in the UK if I need one. Being NR and NNR has its pros and cons, but at least I will not be in for any nasty surprises..I hope!

Thanks for the replies. John I am very surprised nationwide let you have a Thai address, do they post your ATM cards here? When I asked them they said noway but my registered address was not here. Good thing is they are issuing cards with longer dates on now. I have looked at offshore but the there is a lot of hassle opening accounts from what i have seen so will stick with on shore accounts. I am waiting for a reply from customs and excise website but they say it takes 15 working days to send one.

[chiang mai]

Google HMRC6, locate the document, download it and read it, everything is there.

[Morden]

Google HMRC6, locate the document, download it and read it, everything is there.

Many thanks. That's what a few of us have been looking for.

[chiang mai]

Google HMRC6, locate the document, download it and read it, everything is there.

Many thanks. That's what a few of us have been looking for.

One key point to remember when considering the issue of residency vs non residency: if you become non-resident you will need to remain so for at least five years, returning to the UK and becoming resident again within that time frame means that you will be taxed on your worldwide earnings for the years that you were away, a nasty little surprise for many. But, if you remain non-resident until the sixth year you are in the clear.

Another point worth noting: it used to be the case that money was only taxable when it was brought into the UK from overseas. HMRC has changed this rule and overseas income is now taxable as it arises, regardless of whether it is brought back into the UK or not.

[thai3]

Google HMRC6, locate the document, download it and read it, everything is there.

Many thanks. That's what a few of us have been looking for.

You might want to change that if you try and read it-I'm more confused than ever, more of a small book than a document. I see from the govt site that form R105 is the one to fill out and post to the tax office to tell them you are non resident, unfortunately it comes to a dead link with no form! R43 for claiming back tax does work.

Edited February 7, 2010 by thai3

[chiang mai]

Google HMRC6, locate the document, download it and read it, everything is there.

Many thanks. That's what a few of us have been looking for.

You might want to change that if you try and read it-I'm more confused than ever, more of a small book than a document. I see from the govt site that form R105 is the one to fill out and post to the tax office to tell them you are non resident, unfortunately it comes to a dead link with no form! R43 for claiming back tax does work.

I agree it's not a simple read but it's written in plain and simple English hence it's a case of trying to understand all the different scenario's and that's not easy. But frankly, I reckon every expat really does need to understand what's written in it because it represents the Revenue rules of the game and boy how they have changed over time. In a nutshell, it's not easy to become an expat in the eyes of the Revenue, even harder to stay that way and dead easy to become resident once again - fact is, Revenue seems to have the ability to declare you resident based on your lifestyle and that's horrendous.

I read a case study a couple of weeks ago regarding a UK citizen who had left the UK but still had rental property there and also maintained a bank account with one of the high street banks - the person had lived overseas for nine years, visiting the UK about twice a year and paying tax on the UK rental income. A dispute arose and after much tooing and froing the Revenue decided that he was in fact a UK resident by virtue of his UK assets, income and visits thus he is now being assessed for tax on his worldwide offshore income for the nine years he has been absent, scary stuff.

[briley]

Chiang Mai -

I think you are wrong. To be non-resident for tax purposes you only have to be out of the UK for one complete TAX year (ie April to April).

The 5 year rule only applies to capital gains. If you become non-resident you do not pay capital gains tax. But if you become resident before you have been non-resident for 5 tax years you have to pay all the capital gains tax that accrued.

Agreed with you last posting, being resident or non-resident is not as clear as it used to be. Maintaining ties with the UK can now make you resident even if you only visit for 93 days.

From what I see if you only visit the UK for less than 182 days in any one year and less than an average of 93 days in the last 4 years you remain non-resident. Days of entering and leaving the UK did not count as in the UK.

But some people were living in the channel islands, flying to London, working 4 days and flying back. Just 2 days in the UK. Do that for 40 weeks a year only 80 days in the UK so non-resident. As the rule of not counting days of arrival and departure as being in the UK is a concession and not the law the tax man said in these cased all days will count so they became resident. Very fair in my opinion.

They also added some stuff about houses, bank accounts etc. Generally they only catch people who seem to be abusing the non-resident rules but I think the rules are not, currently, clear enough. I am old enough to remember the time when owning a house in the UK made you resident even if you never visited the country.

edited:

PS forgot the 90 day average has gone.

Edited February 7, 2010 by briley

[chiang mai]

Chiang Mai -

I think you are wrong. To be non-resident for tax purposes you only have to be out of the UK for one complete TAX year (ie April to April).

The 5 year rule only applies to capital gains. If you become non-resident you do not pay capital gains tax. But if you become resident before you have been non-resident for 5 tax years you have to pay all the capital gains tax that accrued.

Agreed with you last posting, being resident or non-resident is not as clear as it used to be. Maintaining ties with the UK can now make you resident even if you only visit for 93 days.

From what I see if you only visit the UK for less than 182 days in any one year and less than an average of 93 days in the last 4 years you remain non-resident. Days of entering and leaving the UK do not count as in the UK.

But some people were living in the channel islands, flying to London, working 4 days and flying back. Just 2 days in the UK. Do that for 40 weeks a year only 80 days in the UK so non-resident. As the rule of not counting days of arrival and departure as being in the UK is a concession and not the law the tax man said in these cased all days will count so they became resident. Very fair in my opinion.

They also added some stuff about houses, bank accounts etc. Generally they only catch people who seem to be abusing the non-resident rules but I think the rules are not, currently, clear enough. I am old enough to remember the time when owning a house in the UK made you resident wven if you never visited the country.

I'm being called for dinner and have to run hence I cannot spend more than a few lines on this but will follow up tomorrow - in short, I think we are talking at cross purposes, capital gains is something that I deal with entirely outside of these discussions, the points I have made so far are all based on income and CG - have you been thru HMRC6 et al ? cheers

[AbeSurd]

This thread could be a very useful opportunity for those who know about or have experiences of the issues affecting British non residents, including pensioners, to inform others. Also, if anyone has found a source of independent professional advice that these people can consult before admitting their status I for one would like to know about it.

I agree. My thanks to the various posters here. Much valuable information.

I'll contribute this. Continuing to be a UK tax payer does NOT entitle you to the complete range of free NHS treatment if you are not deemed to be 'ordinarily resident' in the UK.

http://www.dh.gov.uk/en/Healthcare/Entitle...sable/DH_074374

"Anyone who is deemed to be ordinarily resident in the UK is entitled to free NHS hospital treatment in England. "Ordinarily resident" is a common law concept interpreted by the House of Lords in 1982 as someone who is living lawfully in the United Kingdom voluntarily and for settled purposes as part of the regular order of their life for the time being, with an identifiable purpose for their residence here which has a sufficient degree of continuity to be properly described as settled.

"Anyone who is not ordinarily resident is subject to the National Health Service (Charges to Overseas Visitors) Regulations 1989, as amended. These regulations place a responsibility on NHS hospitals to establish whether a person is ordinarily resident; or exempt from charges under one of a number of exemption categories; or liable for charges.

What about British Nationals? I have paid taxes in the past.

"Nationality or past or present payments of UK taxes and National Insurance contributions are not taken into consideration when establishing residence. The only thing relevant is whether you ordinarily live in the UK."

[chiang mai]

Chiang Mai -

I think you are wrong. To be non-resident for tax purposes you only have to be out of the UK for one complete TAX year (ie April to April).

The 5 year rule only applies to capital gains. If you become non-resident you do not pay capital gains tax. But if you become resident before you have been non-resident for 5 tax years you have to pay all the capital gains tax that accrued.

Agreed with you last posting, being resident or non-resident is not as clear as it used to be. Maintaining ties with the UK can now make you resident even if you only visit for 93 days.

From what I see if you only visit the UK for less than 182 days in any one year and less than an average of 93 days in the last 4 years you remain non-resident. Days of entering and leaving the UK did not count as in the UK.

But some people were living in the channel islands, flying to London, working 4 days and flying back. Just 2 days in the UK. Do that for 40 weeks a year only 80 days in the UK so non-resident. As the rule of not counting days of arrival and departure as being in the UK is a concession and not the law the tax man said in these cased all days will count so they became resident. Very fair in my opinion.

They also added some stuff about houses, bank accounts etc. Generally they only catch people who seem to be abusing the non-resident rules but I think the rules are not, currently, clear enough. I am old enough to remember the time when owning a house in the UK made you resident even if you never visited the country.

edited:

PS forgot the 90 day average has gone.

I disagree that being absent for one year is the sole criteria used in determining residency, the following extract from HMRC6 explains:

“The number of days you are present in the country is only one of the factors

to take into account when deciding your residence position.

If you are in the UK for 183 days or more in the tax year, you will always be

resident here. There are no exceptions to this. You count the total number of

days you spend in the UK – it does not matter if you come and go several

times during the year or if you are here for one stay of 183 days or more. If

you are here for less than 183 days, you might still be resident for the year.

You should always look at the pattern of your lifestyle when deciding

whether you are resident in the UK. Things you should consider would

include what connections you have to the UK such as family, property,

business and social connections. Just because you leave the UK to live or

work abroad does not necessarily prove that you are no longer resident here

if, for example, you keep connections in the UK such as property, economic

interests, available accommodation, and social activities or if you have

children in education here.

For example, if you are someone who comes to the UK on a regular basis

and have a settled lifestyle pattern connecting you to this country, you are

likely to be resident here.”

When I talked about being absent from the UK for less than five years I was not referring to Capital Gains but to ordinary taxation matters. The following excerpts explain:

“If you have been resident in the UK, go to live abroad and then return to the

UK at a later date which is less than five full tax years since your date of

departure from the UK, you will have been temporarily non-resident in the

UK. It is possible that any 'relevant foreign income' which you brought to

the UK during the time you were not resident in the UK, will be chargeable

to UK tax in the year you become resident again in the UK.

This rule will apply if you were resident in the UK for at least four of the

last seven tax years before you left the UK.

'Relevant Foreign Income' is any foreign income which arises from a source

outside the UK and is not from your employment. It includes:

• dividends from foreign companies

• profits of a property business (rental income)

• the profits of a trade, profession or vocation which is carried out wholly

outside the UK

• pensions and annuities

• interest

• royalties.”

[Morden]

Thanks for that further information, Chiang Rai.

I still have the impression that it is the UK tax authorities that decide the matter of residency. To allow people to make their own decision would be to allow them to manipulate their tax liability. It seems, too, quite easy to prove UK residency by way of having friends, family, an available home and a few other things but the show stopper in many cases might be the reference to visiting the UK 'on a regular basis'. Now, I go once a year and that is regular. I suspect, though, that 'frequent' is meant rather than 'regular'.

Regarding capital gains, the note in the previous post refer to gains taken into the UK, not those left abroad. Also, it seems to exclude income from employment.

[chiang mai]

Thanks for that further information, Chiang Rai.

I still have the impression that it is the UK tax authorities that decide the matter of residency. To allow people to make their own decision would be to allow them to manipulate their tax liability. It seems, too, quite easy to prove UK residency by way of having friends, family, an available home and a few other things but the show stopper in many cases might be the reference to visiting the UK 'on a regular basis'. Now, I go once a year and that is regular. I suspect, though, that 'frequent' is meant rather than 'regular'.

Regarding capital gains, the note in the previous post refer to gains taken into the UK, not those left abroad. Also, it seems to exclude income from employment.

I agree, if you go once a year then that's probably fine - the problem comes with "creep". Go once a year but have lots of UK based investments, maybe that's OK, but have income property there also, hmm, not sure. Go two or three times, have investments, have property and have family there, who knows! You can see the problems the Revenue has in trying to establish firm guidelines on this where some folks are quite clearly trying it on and pushing the test to the limit.

Edited February 8, 2010 by chiang mai

[JAS21]

If it helps…I am registered, with HRMC, as ‘Non Resident’ and ‘Not Normally Resident’. I pay UK tax on everything earned in the UK..eg pension and house rentals.

I can use an offshore savings bank eg Isle of Mann and not be taxed on the interest.

I have a Nationwide Flex Account and ATM card with the registered address here in Thailand, statements/letters etc from them come here.

I use my sons address in the UK if I need one. Being NR and NNR has its pros and cons, but at least I will not be in for any nasty surprises..I hope!

Thanks for the replies. John I am very surprised nationwide let you have a Thai address, do they post your ATM cards here? When I asked them they said noway but my registered address was not here. Good thing is they are issuing cards with longer dates on now. I have looked at offshore but the there is a lot of hassle opening accounts from what i have seen so will stick with on shore accounts. I am waiting for a reply from customs and excise website but they say it takes 15 working days to send one.

Yes they have posted an ATM card here....also a card reader...both got here!!

Opening an off shore account just needs... 1, a proof of address...a UK bank statement suffices of course with your Thailand address...I obviously keep my UK Current Account as well as my Nationwide Flex a/c....and 2, proof of who you are, this needs a signed copy of your passport ( see the rules of the bank as to who can sign).

The best off shore one year fixed rates at present are Anglo Irish (IOM) (3.55%) and ( two year 4.05% and are at least equal to UK onshore rates. Look at thisismoney.co.uk. If you are a 40% tax payer then I think that it is worth it.

The biggest financial draw back to living here for us is the cost of our private medical insurance..previously we had a company scheme which covered in and out patients. Now we pay a lot more (same company) and only in patient cover. Haveing a bad record, neither of us can afford to change. We use PPP International..I actually checked with BUPA Thailand, slightly cheaper, but of course past history would not be covered. The other big cost compared to the UK is the car.

Hope this helps.

[PattayaParent]

Thanks for that further information, Chiang Rai.

I still have the impression that it is the UK tax authorities that decide the matter of residency. To allow people to make their own decision would be to allow them to manipulate their tax liability. It seems, too, quite easy to prove UK residency by way of having friends, family, an available home and a few other things but the show stopper in many cases might be the reference to visiting the UK 'on a regular basis'. Now, I go once a year and that is regular. I suspect, though, that 'frequent' is meant rather than 'regular'.

Regarding capital gains, the note in the previous post refer to gains taken into the UK, not those left abroad. Also, it seems to exclude income from employment.

I agree, if you go once a year then that's probably fine - the problem comes with "creep". Go once a year but have lots of UK based investments, maybe that's OK, but have income property there also, hmm, not sure. Go two or three times, have investments, have property and have family there, who knows! You can see the problems the Revenue has in trying to establish firm guidelines on this where some folks are quite clearly trying it on and pushing the test to the limit.

It would be very easy for them to establish firm rules, but they prefer them to be obscure and open to their interpretation of you being resident and liable for tax.

[briley]

I disagree that being absent for one year is the sole criteria used in determining residency, the following extract from HMRC6 explains:

<SNIPPED>

When I talked about being absent from the UK for less than five years I was not referring to Capital Gains but to ordinary taxation matters. The following excerpts explain:

“If you have been resident in the UK, go to live abroad and then return to the

UK at a later date which is less than five full tax years since your date of

departure from the UK, you will have been temporarily non-resident in the

UK. It is possible that any 'relevant foreign income' which you brought to

the UK during the time you were not resident in the UK, will be chargeable

to UK tax in the year you become resident again in the UK.

This rule will apply if you were resident in the UK for at least four of the

last seven tax years before you left the UK.

'Relevant Foreign Income' is any foreign income which arises from a source

outside the UK and is not from your employment. It includes:

• dividends from foreign companies

• profits of a property business (rental income)

• the profits of a trade, profession or vocation which is carried out wholly

outside the UK

• pensions and annuities

• interest

• royalties.”

Chiang Mai, - I agree with you fully that the 183 day rule is no longer the sole deciding matter, and I think it is a regressive step back to the situation in the 1970's. I have sympathy with PattyaParent who wants firm rules, but I also have sympathy with the tax man - when he makes firm rules some rich people earn millions and do not pay more than a few % tax by claiming non-residency.

But picking up the part of the booklet HMRC6 (pg 39 if others want to find it) I disagree a bit with what sounds like your interpretation.

I felt you make it sound as though unless you are out of the UK for 5 years then you will be taxed and treated as resident. But the quote has a number of weasel words such as "it is possible that'.

In addition the I think the income has to be "brought into the UK" for it to be taxable. Easy to avoid if you remit part of the capital but keep the interest outside the UK.

In addition it seems to be that income from employment (for most people their major income) is not taxable (provided duties solely outside the UK etc etc).

Incidentally in my case I decided a few years back that it was better (or easier) for me to be UK resident for tax purposes and dropped all claims of non residency.

Tax on all dividends is always taxed at 10% whether resident or not.

Tax on any UK based pension it taxed in the UK whether resident or not.

Tax on rental income from the UK is UK taxed whether resident or not.

Tax on Thai rental income is taxable in Thailand then the UK - but be honest who declares it?

Interest on savings can be tax free if non-resident but often the rates and the terms offered 'offshore' are poorer than the UK and no protection against bank collapse. But interest from an ISA is also tax free and put in £5100 a year and it quickly takes the majority of your cash savings out of the tax net.

So for the majority of people in Thailand the question as to whether to be resident or non-resident is rather academic and most will find the tax paid the same whatever their status.

And anyone who does not fall into this camp should not be seeking advice on Thai Visa!

[chiang mai]

I disagree that being absent for one year is the sole criteria used in determining residency, the following extract from HMRC6 explains:

<SNIPPED>

When I talked about being absent from the UK for less than five years I was not referring to Capital Gains but to ordinary taxation matters. The following excerpts explain:

“If you have been resident in the UK, go to live abroad and then return to the

UK at a later date which is less than five full tax years since your date of

departure from the UK, you will have been temporarily non-resident in the

UK. It is possible that any 'relevant foreign income' which you brought to

the UK during the time you were not resident in the UK, will be chargeable

to UK tax in the year you become resident again in the UK.

This rule will apply if you were resident in the UK for at least four of the

last seven tax years before you left the UK.

'Relevant Foreign Income' is any foreign income which arises from a source

outside the UK and is not from your employment. It includes:

• dividends from foreign companies

• profits of a property business (rental income)

• the profits of a trade, profession or vocation which is carried out wholly

outside the UK

• pensions and annuities

• interest

• royalties.”

Chiang Mai, - I agree with you fully that the 183 day rule is no longer the sole deciding matter, and I think it is a regressive step back to the situation in the 1970's. I have sympathy with PattyaParent who wants firm rules, but I also have sympathy with the tax man - when he makes firm rules some rich people earn millions and do not pay more than a few % tax by claiming non-residency.

But picking up the part of the booklet HMRC6 (pg 39 if others want to find it) I disagree a bit with what sounds like your interpretation.

I felt you make it sound as though unless you are out of the UK for 5 years then you will be taxed and treated as resident. But the quote has a number of weasel words such as "it is possible that'.

Yes noted, the trouble is that those weasel words work both ways - the fact remains that this leaves the door open for HMRC to tax those earnings within the five year window and that's scary. As things stand I do believe that earnings inside of five years are liable to UK tax, that's my interpretation at least.

In addition the I think the income has to be "brought into the UK" for it to be taxable. Easy to avoid if you remit part of the capital but keep the interest outside the UK.

No, I don't think that's the case. HMRC6 introduced for the first time the notion of arising income versus remitted income - that is to say that income becomes taxable as it occurs and doesn't have to be remitted to be liable to tax.

In addition it seems to be that income from employment (for most people their major income) is not taxable (provided duties solely outside the UK etc etc).

Let's look at that for a moment, say a UK resident is sent overseas to work for a year, during that time they remain resident in the UK for tax purposes because they need to have spent at least one year outside the UK before they can become non-resident! So presumably the years earnings will be taxed by the country in which they work and double taxation agreements will offset any extra tax. But the fact seems to be that the money earned overseas during that year is still liable to UK tax by virtue of the one year rule.

Incidentally in my case I decided a few years back that it was better (or easier) for me to be UK resident for tax purposes and dropped all claims of non residency.

Tax on all dividends is always taxed at 10% whether resident or not.

Tax on any UK based pension it taxed in the UK whether resident or not.

Tax on rental income from the UK is UK taxed whether resident or not.

Tax on Thai rental income is taxable in Thailand then the UK - but be honest who declares it?

Interest on savings can be tax free if non-resident but often the rates and the terms offered 'offshore' are poorer than the UK and no protection against bank collapse. But interest from an ISA is also tax free and put in £5100 a year and it quickly takes the majority of your cash savings out of the tax net.

I think the key issue with the above is earnings thresholds. If say a UK pensioner has their state pension paid to them overseas and it's taxed at source but that is their only UK based earnings the tax can be reclaimed, ditto dividend and interest income - for a person aged 65 that represents around £9,500 per year of tax free income which is not insignificant.

So for the majority of people in Thailand the question as to whether to be resident or non-resident is rather academic and most will find the tax paid the same whatever their status.

And anyone who does not fall into this camp should not be seeking advice on Thai Visa!

Edited February 8, 2010 by chiang mai

[briley]

Chiang Mai,

I do not like it either.

Leaves the possibility of being non-resident for 4 years then return to the UK and all your income for the 4 years is taxed in that one year - to quote the inland revenue "will be chargeable to UK tax in the year you become resident again in the UK."

My reason for thinking only remitted income is the line before the above "which you brought to the UK during the time you were not resident in the UK"

I think the courts are going to have to make some interesting decisions in this area.

Fortunately it does not apply to me now.

[chiang mai]

Chiang Mai,

I do not like it either.

Leaves the possibility of being non-resident for 4 years then return to the UK and all your income for the 4 years is taxed in that one year - to quote the inland revenue "will be chargeable to UK tax in the year you become resident again in the UK."

My reason for thinking only remitted income is the line before the above "which you brought to the UK during the time you were not resident in the UK"

I think the courts are going to have to make some interesting decisions in this area.

Fortunately it does not apply to me now.

Me neither, I'm well past the five year mark -

[chiang mai]

Somebody asked earlier about entitlement to NHS services whilst living abroad. I came across the following by chance hence it may be useful to understand it:

http://www.dh.gov.uk/en/Healthcare/Entitle...sable/DH_074384

I think the relevant phrase is:

"If you go anywhere abroad for more than three months, either for a one-off extended holiday for a few months or to live permanently for several years, but then return to the UK to take up permanent residence here again, then you will be entitled to receive free NHS hospital treatment from the day you return".

[PattayaParent]

^be careful of that one then if you are seeking to maintain non-domiciled status and temporarily return to UK.

If you get treatment under the NHS the IHT tax man may consider you have taken up permanent residence again and are therefore once again domiciled in UK.

[chiang mai]

A good point, personally I can't imagine the circumstances under which I might opt for NHS treatment over the local alternatives, perhaps if THB reaches 35 I might, dam_n, where did I put my NHS card, (joking of course).