Uk Taxation

[loong]

Hi,

I've posted here in the general forum as I don't think that this is necessarily related to the business section.

Although if you spend 90 days or more outside of the UK, you may be considered a non-resident and lose entitlement to benefits such as NHS, it now appears that you be out of the country for 30 years, without returning, yet still be treated as a resident for tax purposes.

http://www.telegraph.co.uk/finance/persona...-tax-bills.html

Edited March 17, 2010 by loong

[davee58]

Although if you spend 90 days or more outside of the UK, you may be considered a non-resident and lose entitlement to benefits such as NHS, it now appears that you be out of the country for 30 years, without returning, yet still be treated as a resident for tax purposes.

Not quite, if you read the article again you will see that Mr Gains-Cooper had been "not coming back for more than 90 days a year".

However (from my understanding) he had his wife in the UK, Kids at school in the UK, owned property in the UK, and made a significant number of visits to the UK...

hence his life was demonstrably based around the UK.

I do not know details of his visits, but until recently the day of arrival and departure in the UK did not count towards the total.

- (If you flew out every morning, and returned every evening, were you ever there??)

There have never been any precise guidelines for non-residency, this case shows somebody who lived within the accepted guidelines, and ended up being shafted.

What worries me is the retrospective reinterpretation of the rules over such a long time period, that is the part that seems wrong.

Moral of the tale: Move the wife and kids to Pattaya.

[PattayaParent]

E-Bulletin 108 – Residence Rules - A Considered Opinion

We recently reported on a ruling regarding Mr Gaines-Cooper and UK residence rules. Whilst there has been tremendous interest in this story, many press reports could be seen to be ‘scare-mongering’, causing unnecessary concern for British expats.

In fact, the latest Gaines-Cooper judgment should reassure British expatriates. The ruling found, unanimously, that UK residence rules provide accurate, reliable and (in certain circumstances) binding guidance. The Revenue has not changed the residence rules or covertly changed approach. As we have reported before, the taxman has certainly increased the level of scrutiny on non-resident taxpayers, but the approach has been consistent with the published guidance and the precedent set over many years.

However, a couple of important points have been highlighted by these recent events.

Firstly, the ruling confirmed that if a taxpayer leaves the UK for full-time overseas employment, which lasts for one complete tax year, and remains within the standard visiting limitations, that person will be non-resident. Do remember that any work duties performed in the UK must be merely incidental to those performed abroad. It is also clear that having a home, family and regular return visits to the UK (within the guidelines) will not impact non-resident status. This is very good news and a welcome clarification which will set many people's minds at rest.

Secondly, the ruling confirmed that if a taxpayer leaves the UK for any other reason, the ‘non-resident bar’ is set at a much higher level. Those who fall into this category need to demonstrate that they have clear break from the UK. This would normally involve giving up a home and breaking links to clubs, financial, social and family ties. Clearly it is not enough to move abroad purportedly for permanent residence without a full time overseas employment and yet leave close family (spouse and dependent children) in the UK, or to keep a property in Britain that is used regularly.

This is bad news – many expatriates are retired or work part time but have maintained active ties to the UK - such as a property or regular visits to immediate family. The ruling is explicit in saying that unless a clean break from the UK can be demonstrated, there is a presumption that UK resident status will have continued. Emboldened by this, it may be that the taxman increases scrutiny of non-residents in this category, especially those who are very wealthy.

In short, anyone who is not in full-time overseas employment and who maintains ties to the UK needs to think carefully about their position and what modifications may be in their best interests. Every case needs to be reviewed on its own merits.

[chiang mai]

E-Bulletin 108 – Residence Rules - A Considered Opinion

We recently reported on a ruling regarding Mr Gaines-Cooper and UK residence rules. Whilst there has been tremendous interest in this story, many press reports could be seen to be ‘scare-mongering’, causing unnecessary concern for British expats.

In fact, the latest Gaines-Cooper judgment should reassure British expatriates. The ruling found, unanimously, that UK residence rules provide accurate, reliable and (in certain circumstances) binding guidance. The Revenue has not changed the residence rules or covertly changed approach. As we have reported before, the taxman has certainly increased the level of scrutiny on non-resident taxpayers, but the approach has been consistent with the published guidance and the precedent set over many years.

However, a couple of important points have been highlighted by these recent events.

Firstly, the ruling confirmed that if a taxpayer leaves the UK for full-time overseas employment, which lasts for one complete tax year, and remains within the standard visiting limitations, that person will be non-resident. Do remember that any work duties performed in the UK must be merely incidental to those performed abroad. It is also clear that having a home, family and regular return visits to the UK (within the guidelines) will not impact non-resident status. This is very good news and a welcome clarification which will set many people's minds at rest.

Secondly, the ruling confirmed that if a taxpayer leaves the UK for any other reason, the ‘non-resident bar’ is set at a much higher level. Those who fall into this category need to demonstrate that they have clear break from the UK. This would normally involve giving up a home and breaking links to clubs, financial, social and family ties. Clearly it is not enough to move abroad purportedly for permanent residence without a full time overseas employment and yet leave close family (spouse and dependent children) in the UK, or to keep a property in Britain that is used regularly.

This is bad news – many expatriates are retired or work part time but have maintained active ties to the UK - such as a property or regular visits to immediate family. The ruling is explicit in saying that unless a clean break from the UK can be demonstrated, there is a presumption that UK resident status will have continued. Emboldened by this, it may be that the taxman increases scrutiny of non-residents in this category, especially those who are very wealthy.

In short, anyone who is not in full-time overseas employment and who maintains ties to the UK needs to think carefully about their position and what modifications may be in their best interests. Every case needs to be reviewed on its own merits.

Not 100% correct PP, the following article clarifies:

http://www.telegraph.co.uk/finance/persona...-tax-bills.html

One of the key statements follows:

"The Withers spokesman continued: "Instead, they are allowing this unsatisfactory position to continue, so that even an individual who leaves the UK for a whole tax year and does not return for a single day cannot definitively be said to be non-UK resident."

[loong]

Thankyou, PattayaParent, a useful post

I have property in the UK that is rented out, this is declared to the Inland Revenue, so I don't have a problem with this personally.

This must be a concern for some people though. A window is left open for the taxman to sneak in and grab some more money, especially as the British Government is in a pretty sorry state financially and will soon be investigating every possibility and loophole to swell the coffers.

[davidthai]

I am being taxed on my UK Pension and a small private pension i get, not only do the government not link my pension to the rise in the cost of living because i live in Thailand ,they also tax me on it , i do not have a residence in UK and my yearly tax statement shows my Thailand address , if i lived in Spain or elsewhere i would receive the link to my pension yearly , are other TV members from UK who receive a UK Pension being taxed or am i missing out on some allowance i dont know about

[PattayaParent]

Not 100% correct PP, the following article clarifies:

http://www.telegraph.co.uk/finance/persona...-tax-bills.html

One of the key statements follows:

"The Withers spokesman continued: "Instead, they are allowing this unsatisfactory position to continue, so that even an individual who leaves the UK for a whole tax year and does not return for a single day cannot definitively be said to be non-UK resident."

But the leader of that article is

HM Revenue & Customs has reissued its guidance to expats claiming residency abroad as a result of a Court of Appeal decision about 'non-doms' who left the UK for tax purposes.

and domicile is a completely different issue to 'not resident' or 'not ordinarily resident' for tax purposes for those working overseas.