Uk Citizens - Non-Resident Or Not?

[w11guy]

Of the people that have retired here that are from the UK, do you have non-resident status in the UK? What do you think are the advantages and disadvantages.

Also, if non-resident, do you still use UK credit cards. I was going to apply for a new one, but one of the questions asks if you're a UK resident. If you're not then you can't get the card.

I'd be interested to know how others have coped with these sorts of issues and if there are any issues that i haven't considered.

[Soutpeel]

Well simply put if you claim you are resident in the UK and are in fact not and you are claiming pension increases, obtaining credit cards etc you are comittting fraud, cant have the best of both worlds

[endure]

What do you mean by 'non-resident'? Do you mean that you have no address in the UK or are you talking about being non-resident for HMRC purposes?

[CharlieH]

I think in general terms Non - resident means you no longer have a UK address and have stayed more than 6 months continuously outside the UK.

From HMRC:

To be regarded as resident in the UK you must normally be physically present in the

country at some time in the tax year. You will always be resident if you are here for 183

days or more in the tax year. There are no exceptions to this.

If you claim that you are no longer resident and ordinarily resident, we may ask you to

give some evidence that you have left the UK either permanently or to live outside the

UK for three years or more. This evidence might be, for example, that you have taken

steps to acquire accommodation abroad to live in as a permanent home, and if you

continue to have property in the UK for your use, the reason is consistent with your

stated aim of living abroad permanently or for three years or more. If you have left the

UK permanently or for at least three years, you will be treated as not resident and not

ordinarily resident from the day after the date of your departure providing

• your absence from the UK has covered at least a whole tax year, and

• your visits to the UK since leaving

- have totalled less than 183 days in any tax year, and

- have averaged less than 91 days a tax year. (The average is taken over the

period of absence up to a maximum of four years - see paragraph 2.10. Any

days spent in the UK because of exceptional circumstances beyond your

control, for example the illness of yourself or a member of your immediate

family, are not normally counted for this purpose.)

information source: http://www.hmrc.gov.uk/pdfs/ir20.pdf

Edited April 16, 2012 by CharlieH

[Orac]

There was a consultation document from last year by HMRC regarding changes/simplifications to residence rules as regards tax implications - my apologies to the member that posted it on here a few weeks back but I can't remember who it was. There is also a useful test you can download to check if you would qualify.

consult_condoc_statutory_residence.pdf

[Eff1n2ret]

This HMRC leaflet explains the various terms regarding residence, and also how it affects your tax:-

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

As regards a credit card application, I guess if it's an entirely new application you may well be stuffed. Before I left I told my cc providers I was going to be abroad for an extended period. One of them was a bit sniffy and said the abroad notification would last three months - the account still works after 2.1/2 years. The other, HSBC Visa, were totally obliging and I use their card virtually every month for something or other. Both have my address here, although the easiest thing is to do everything online. The HSBC card was renewed last year with no problem. Everybody, HMRC, DSS, pension providers, UK bank etc, all know I'm here, and that works for me.

Having said that, I'm not 'Non-resident' for tax purposes, because it seems that most UK-derived pensions are subject to UK tax, so I can't see any advantage. The leaflet says that 'Most UK pensions' are subject to tax, but I couldn't see anything which clarifies which pensions are not.

As a general point anyone who just gets on a plane and leaves without thinking through everything to do with your bank account, income sources, tax, credit cards etc and making suitable arrangements is likely to run into trouble after a while.

Edit:- I see that whilst I was stumbling through my post others have posted appropriate links

Edited April 16, 2012 by Eff1n2ret

[w11guy]

Well simply put if you claim you are resident in the UK and are in fact not and you are claiming pension increases, obtaining credit cards etc you are comittting fraud, cant have the best of both worlds

You have misunderstood my question. What you say is true, but that wasn't an answer to my question. Whether you are non-resident or not isn't a black and white issue. You can claim to be non-resident with HMRC but they may not agree with you even if you are out of the country most of the time. I'm not asking whether people have committed fraud or not, but asking how they have arranged their affairs. For example, if you live in Thailand full-time but INTEND to go back to live in the UK in the future then you can still be considered as resident in the UK. Or maybe people go back regularly to maintain their residency. Just wondering what most people choose or prefer. Maybe you still have a home in the UK and still conduct your affairs from there. That would mean you are not be able to claim non-resident status.

[TommoPhysicist]

Well simply put if you claim you are resident in the UK and are in fact not and you are claiming pension increases, obtaining credit cards etc you are comittting fraud, cant have the best of both worlds

Maybe you still have a home in the UK and still conduct your affairs from there. That would mean you are not be able to claim non-resident status.

I do this, makes everything easier.

Bank and creditcards I just get a photocopy (front and back) emailed to me for online purchasing.

[w11guy]

This HMRC leaflet explains the various terms regarding residence, and also how it affects your tax:-

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

As regards a credit card application, I guess if it's an entirely new application you may well be stuffed. Before I left I told my cc providers I was going to be abroad for an extended period. One of them was a bit sniffy and said the abroad notification would last three months - the account still works after 2.1/2 years. The other, HSBC Visa, were totally obliging and I use their card virtually every month for something or other. Both have my address here, although the easiest thing is to do everything online. The HSBC card was renewed last year with no problem. Everybody, HMRC, DSS, pension providers, UK bank etc, all know I'm here, and that works for me.

Having said that, I'm not 'Non-resident' for tax purposes, because it seems that most UK-derived pensions are subject to UK tax, so I can't see any advantage. The leaflet says that 'Most UK pensions' are subject to tax, but I couldn't see anything which clarifies which pensions are not.

As a general point anyone who just gets on a plane and leaves without thinking through everything to do with your bank account, income sources, tax, credit cards etc and making suitable arrangements is likely to run into trouble after a while.

Edit:- I see that whilst I was stumbling through my post others have posted appropriate links

I've had the same experience with my credit cards. I told them I will be here for a few years and they were fine. But the odd thing is that one of the companies that is fine with me using my card and living here won't let me apply for a different card. But I think in general that they want to keep you as a customer if you spend money and pay on time. They are making a profit from you, so they have no reason to stop you using your card.

There are some major advantages to being non-resident. You are not liable to CGT and not liable to tax on many types of earnings. I have money from affiliate marketing being paid to my UK bank account. That is not subject to tax because I'm non-resident. And when I sell my assets there won't be any tax to pay. It all depends on your individual circumstances though. If I go back to UK on holiday and get ill and need to see a doctor, then I will have to pay, as you can't get NHS treatment for free if you're non-resident. Although I can't see how they would possibly know this. I can't really imagine HMRC passing the info to the NHS and it actually getting onto a system that every doctor and hospital has access to.

[w11guy]

I think in general terms Non - resident means you no longer have a UK address and have stayed more than 6 months continuously outside the UK.

That's completely incorrect. If you are in the UK over 90 days you will definitely be resident if you are a UK citizen. If you are there less than 90 days you can also still be resident there. Your intention counts a lot. You can't be non-resident if you go away for a few years with the intention of returning at a later date. The rules can get very complex. HMRC has won cases where people have been in the UK for less than 90 days each year and have claimed non-resident status. While they lived abroad they still at a home in the UK, so were still resident here. You can in fact be resident for tax purposes in more than one country.

[w11guy]

Well simply put if you claim you are resident in the UK and are in fact not and you are claiming pension increases, obtaining credit cards etc you are comittting fraud, cant have the best of both worlds

Maybe you still have a home in the UK and still conduct your affairs from there. That would mean you are not be able to claim non-resident status.

I do this, makes everything easier.

Bank and creditcards I just get a photocopy (front and back) emailed to me for online purchasing.

Yes, this can make things a lot easier. But don't forget the tax implications if you have assets to sell that will be liable to CGT.

[exeter]

Different agencies/organisation have different views as to what constituted residency. I spend 9 months here a year, changed my bank last year and told them all the details of UK address, in THailand 9 months so I needed a card for living expenses and I have a debit card.

I would always try and keep UK residency and most fianaces in the UK, no one knows what the future holds, no point in burning bridges.

If you are here for more than 3 months you can open a local account at a bank and get a Thai credit card if you wish

For travel insurance purposes you are required to be have been a UK resident for the previous 90 days before it commences, dont think because you were born in the UK and have a UK address is sufficient it is not, always exactly what they means by residency, assume nothing it could come back to haunt you.

[Eff1n2ret]

If you are here for more than 3 months you can open a local account at a bank and get a Thai credit card if you wish

.

Certainly, no problem opening a bank account, but are you sure about Thai Credit Card? When I looked at Kasikorn's requirements, they were basically work permit and evidence of paid income, payslips, tax receipts etc, at which I gave up. Although my UK credit card fits the bill I wouldn't mind a Thai card, as drawing on a Thai account where I've already transferred funds probably represents a better exchange rate. The UK card takes a handsome profit.

[chiang mai]

HMRC rules on UK residency are currently under review and there's avery interesting discussion paper on the subject, the rules, soon to be changed, will incude a residency test that involves a series of criteris that must be rated as pass or fail, it's worth digging around to try and find it. If somebody doesn't post that document then I can.

As far as credit cards are concerned: it's easily possible to keep existing UK credit cards and change the mailing address, I have done that with HSBC Master Card and Barclaycard, both of whom bill me and correspond with me at my address here and both organisations are well aware I don't live in the UK, this being true for the past seven years.

Finally, I'm not UK resident and want to keep it that way for tax reasons and eventually because of domicile.

[cardholder]

If you are here for more than 3 months you can open a local account at a bank and get a Thai credit card if you wish

.

Certainly, no problem opening a bank account, but are you sure about Thai Credit Card? When I looked at Kasikorn's requirements, they were basically work permit and evidence of paid income, payslips, tax receipts etc, at which I gave up. Although my UK credit card fits the bill I wouldn't mind a Thai card, as drawing on a Thai account where I've already transferred funds probably represents a better exchange rate. The UK card takes a handsome profit.

My UK cards take no profit.

I use all as a 'charge card' and clear any balances each month.

A friend who requested a Kasikorm credit card was told to deposit 50,000 Baht in a separate account to cover any expenditure.

[NancyL]

Yes, the credit card companies make money even if you use it as a 'charge card' and clear any balances each month.

The merchant pays a small fee to the credit card company everytime you use your credit card. Plus most cards have an annual fee. So, yes, the UK card companies are making a profit, albeit small, even if you clear your balances each month.

[chiang mai]

I do not pay a fee for either of my UK credit cards, HSBC Mastercard and Barclaycard Visa and have not done so for the past seven years.

[Soutpeel]

I think in general terms Non - resident means you no longer have a UK address and have stayed more than 6 months continuously outside the UK.

That's completely incorrect. If you are in the UK over 90 days you will definitely be resident if you are a UK citizen. If you are there less than 90 days you can also still be resident there. Your intention counts a lot. You can't be non-resident if you go away for a few years with the intention of returning at a later date. The rules can get very complex. HMRC has won cases where people have been in the UK for less than 90 days each year and have claimed non-resident status. While they lived abroad they still at a home in the UK, so were still resident here. You can in fact be resident for tax purposes in more than one country.

Not quite, the rules say average of 90 days over a 3 year period

[nong38]

If you are here for more than 3 months you can open a local account at a bank and get a Thai credit card if you wish

.

Certainly, no problem opening a bank account, but are you sure about Thai Credit Card? When I looked at Kasikorn's requirements, they were basically work permit and evidence of paid income, payslips, tax receipts etc, at which I gave up. Although my UK credit card fits the bill I wouldn't mind a Thai card, as drawing on a Thai account where I've already transferred funds probably represents a better exchange rate. The UK card takes a handsome profit.

I have been offered a card at Ayudyah, but declined the offer and I have found it also depends on the bank, some are more interested in foreign custom than others, mainly how many can speak English or can we both make an effort to communicate.

[nong38]

If you are here for more than 3 months you can open a local account at a bank and get a Thai credit card if you wish

.

Certainly, no problem opening a bank account, but are you sure about Thai Credit Card? When I looked at Kasikorn's requirements, they were basically work permit and evidence of paid income, payslips, tax receipts etc, at which I gave up. Although my UK credit card fits the bill I wouldn't mind a Thai card, as drawing on a Thai account where I've already transferred funds probably represents a better exchange rate. The UK card takes a handsome profit.

My UK cards take no profit.

I use all as a 'charge card' and clear any balances each month.

A friend who requested a Kasikorm credit card was told to deposit 50,000 Baht in a separate account to cover any expenditure.

Kasikorn are not friendly to non Thai here and would not even open a savings account for my wife! They wanted her to have "this account with a card" so we left.

[Eff1n2ret]

Yes, the credit card companies make money even if you use it as a 'charge card' and clear any balances each month.

The merchant pays a small fee to the credit card company everytime you use your credit card. Plus most cards have an annual fee. So, yes, the UK card companies are making a profit, albeit small, even if you clear your balances each month.

Yes, I understand that, I clear my balances every month, but it was the profit on the exchange rate to which I was referring. 3 transactions over the period 9 - 11 April billed in baht have been charged at 47.49 (twice) and 47.35 - I can't quote the midmarket rate at that time but I'm pretty sure it was over 49.

So is that HSBC making a good margin or the difference between the Thai banks' "offshore" and "onshore" rates? Does anyone think I would be better off asking to be billed in sterling, which is generally referred to as a very bad practice on travel consumer advice programmes?

[Eff1n2ret]

"A friend who requested a Kasikorm credit card was told to deposit 50,000 Baht in a separate account to cover any expenditure"

"Kasikorn are not friendly to non Thai here "

Where? At the Banchang Rayong branch I found them to be totally welcoming from the start, and giving a very high service level ever since. They couldn't have been more helpful when I stupidly left my ATM card in a machine, and did all the cancellation and issue of a new one in about 20 minutes. But there are a lot of westerners around here.

If they asked to run a separate account with a 50,000 deposit to cover a credit card, I might take them up on that. It's not a huge bunch of dough. It's hardly a "credit card" if they want you to pay in advance, but as a charge card it would be useful in manageing the exchange rate element of purchases in baht, i.e.I've already purchased the baht.

[chiang mai]

I think in general terms Non - resident means you no longer have a UK address and have stayed more than 6 months continuously outside the UK.

That's completely incorrect. If you are in the UK over 90 days you will definitely be resident if you are a UK citizen. If you are there less than 90 days you can also still be resident there. Your intention counts a lot. You can't be non-resident if you go away for a few years with the intention of returning at a later date. The rules can get very complex. HMRC has won cases where people have been in the UK for less than 90 days each year and have claimed non-resident status. While they lived abroad they still at a home in the UK, so were still resident here. You can in fact be resident for tax purposes in more than one country.

Not quite, the rules say average of 90 days over a 3 year period

The rules are in the process of being changed, may already have changed. It's now not based solely on the 90 day rule, that's just one of the criteria, I'll see if I can't post the discussion document that sets it all out.

[Soutpeel]

I think in general terms Non - resident means you no longer have a UK address and have stayed more than 6 months continuously outside the UK.

That's completely incorrect. If you are in the UK over 90 days you will definitely be resident if you are a UK citizen. If you are there less than 90 days you can also still be resident there. Your intention counts a lot. You can't be non-resident if you go away for a few years with the intention of returning at a later date. The rules can get very complex. HMRC has won cases where people have been in the UK for less than 90 days each year and have claimed non-resident status. While they lived abroad they still at a home in the UK, so were still resident here. You can in fact be resident for tax purposes in more than one country.

Not quite, the rules say average of 90 days over a 3 year period

The rules are in the process of being changed, may already have changed. It's now not based solely on the 90 day rule, that's just one of the criteria, I'll see if I can't post the discussion document that sets it all out.

The change in rules has been going on for years and as far as I am aware they still havent changed.

The key change being discussed the last I looked into this related to persons "maintaining a presence" in the UK....if you owned a house, had a car, bank account etc, was going to be very difficult to be declared Non-resident as you were maintaining ties with the UK because of property you owned etc....in other words to be declared fully Non-resident in eyes of HMRC you would need to sever all ties...ie sell your house etc etc

[Orac]

The rules are in the process of being changed, may already have changed. It's now not based solely on the 90 day rule, that's just one of the criteria, I'll see if I can't post the discussion document that sets it all out.

The change in rules has been going on for years and as far as I am aware they still havent changed.

The key change being discussed the last I looked into this related to persons "maintaining a presence" in the UK....if you owned a house, had a car, bank account etc, was going to be very difficult to be declared Non-resident as you were maintaining ties with the UK because of property you owned etc....in other words to be declared fully Non-resident in eyes of HMRC you would need to sever all ties...ie sell your house etc etc

The downloadable online tool (attached) from HMRC should help. The issue doesn't seem to be so much having a home in the UK but, in my case, it being your only home. The attached the consultation document in post #5 - not sure if this is what Chiang Mai is refering to or if there is soomething more up to date now.

consult_statutory_residence_online_tool.xls

[chiang mai]

That's not the document I'm refering to although it does look as though some of the questions in it mirror parts of the document I read. I thought I had a copy but it seems I don't, I'll dig around and try to find it. In essence the document I read talks of having to meet two out four or three out of four conditions in order to become non-resident, it's no longer a straight forward matter of 90 days averaged over four years.

[Ricardo]

I told HMRC when I was leaving permanently, to live out here, and they send me a letter accepting that I became non-resident on the day-after-departure. It took a few years until they finally agreed that I didn't need to complete annual-returns anymore.

I sold my property & car, moved my banking to an offshore (Jersey) branch of the same bank, and closed my UK-accounts, and invested our joint-savings offshore, so that any income arises offshore of both the UK and Thailand.

I believe that loosing my UK-Domicile may take decades, and HMRC seem reluctant, to tell me just what I must do to actually achieve this, escaping Inheritance-Tax when I die may therefore be problematical. I believe that it helps that I now have a Thai-Will, and wish to be cremated in Thailand, not returned to be buried in the UK.

[Satcommlee]

There are too many variations to determine your residency, particularly concerning Tax.

Ordinarily Resident? is a term sometimes used.

If you have substantial ties to UK and are not a "Permanent resident" of Thailand, you may still legally be Resident of UK.

This is a mine field I gave up on years ago! Its just too complicated.

[JAS21]

On the day I left the UK to come and retire to Thailand ... six years ago .. the HMRC wrote to me and made me Non Resident and Not Ordinary Resident. I have a UK bank acount, a bank debit card, rent out two properties, have a company pension and the OAP or whatever it's called now. I am also accepted by HMRC as a A Non-Resident Landlord.

Didn't have any problem getting this status ... I have never been back to the UK since I left ... may go next April though, for a while, to dodge the heat, 'kin hot this year!!!!!

[w11guy]

I think in general terms Non - resident means you no longer have a UK address and have stayed more than 6 months continuously outside the UK.

That's completely incorrect. If you are in the UK over 90 days you will definitely be resident if you are a UK citizen. If you are there less than 90 days you can also still be resident there. Your intention counts a lot. You can't be non-resident if you go away for a few years with the intention of returning at a later date. The rules can get very complex. HMRC has won cases where people have been in the UK for less than 90 days each year and have claimed non-resident status. While they lived abroad they still at a home in the UK, so were still resident here. You can in fact be resident for tax purposes in more than one country.

Not quite, the rules say average of 90 days over a 3 year period

That's the general rule, but HMRC has won cases where people were in the UK for under 90 days for a number of years. The reason being that they still had home, family, bank accounts, etc in the UK. The 90-day rule cab therefore be overridden by other considerations.