U.K. Abolition of Tax Personal Allowance

[icare999]

At the moment people that are non-resident for tax purposes don't have to pay CGT on UK assets. This is due to change in 2015. But apparently only the increase in value from 2015 onwards will be taxable. But no idea how they will work out that value. Not finalized yet, but seems pretty certain to happen.

Too late I'm afraid, CGT is already in effect. Had to pay it on one property last year and another this year.

Doesn't apply to your principle residence (unless you're an MP and can juggle this around) but the Ex got that anyway.

Regarding pensions, tax allowances, etc., they don't care about us expats simply because we can't vote.

I think many Brits that come to live here keep ties with UK and don't even want to be non-resident for tax purposes. So they are still in the tax regime and so have to pay CGT.

You said you had to pay CgT. But are you non-resident for tax purposes? Is that what you claim on your self-assessment and have HMRC agreed with you if you have?

Have been non-resident for tax purposes for many years but had to pay CGT on sale of a UK property last year and another this year. All done via my UK accountant who is normally very much on the ball. Have double checked with him but it was something this gov brought in early on.

If that's not the case, would really like to know.

I still get an Inland Revenue form for every tax year though it's normally 'nil' to declare.

As of now I don't own any UK property or have any income there until my State Pension kicks in. Not sure whether to start taking it now or wait till I need it.

Although I work on 'mobile' offshore rigs I let my Seaman's Ticket expire thinking it wouldn't be of help any more.

I know the 'night spent in the UK' rule but haven't been there for a few years anyway.

What do I know, just a simple drilling hand.

sack your accountant since your totally wrong if your non resident thetis no CGT to pay until this changes as announced inn budget from April 2015 rule is if you return to become resident within 5 years after sale then CGT tax is payable

[icare999]

Have been non-resident for tax purposes for many years but had to pay CGT on sale of a UK property last year and another this year. All done via my UK accountant who is normally very much on the ball. Have double checked with him but it was something this gov brought in early on.

If that's not the case, would really like to know.

I still get an Inland Revenue form for every tax year though it's normally 'nil' to declare.

As of now I don't own any UK property or have any income there until my State Pension kicks in. Not sure whether to start taking it now or wait till I need it.

Although I work on 'mobile' offshore rigs I let my Seaman's Ticket expire thinking it wouldn't be of help any more.

I know the 'night spent in the UK' rule but haven't been there for a few years anyway.

What do I know, just a simple drilling hand.

From HMRC website (http://www.hmrc.gov.uk/international/tax-incomegains.htm)...

Capital Gains Tax

In general you will not be liable to pay tax on capital gains if you are not resident in the UK but there are exceptions. Read more in the section 'Tax on capital gains from assets in the UK' later in this guide.

Tax on capital gains from assets in the UK

If you're not resident in the UK, whether you pay Capital Gains Tax on UK assets will depend on a number of factors:

• if you have previously lived in the UK, and if so, when you left the UK, the period of time you were resident in the UK before your departure and the length of time you live abroad
• whether you are still ordinarily resident (only for tax years up to and including 2012-13) in the UK - that is, your normal home is the UK
• whether the assets are held for the purpose of carrying out work through a UK branch or agency

This website has details about CGT only starting in April 2015 --> http://www.step.org/details-uk-plans-capital-gains-tax-non-residents-property-disposals.

I looked into all this via a tax advisor and was told I didn't need to pay any if I sold my UK property. Maybe you have different circumstances. Ask your accountant why you aren't exempt. Does he know that you're non-resident for tax purposes? Have HMRC agreed that you are? And to be clear, being out of the UK for a few years with the intention of returning does not give you non-resident tax status. You may not pay UK tax in the years you're away, but you are still resident for tax purposes, meaning you'd still pay CGT on UK assets.. Non-resident tax status is for people that have permanently left the UK and severed all ties and have no intention of returning. That's what I have done. Left 4 years ago and haven't been back at all. I don't intend to ever live there again.

This government documents seems to clear state that they are changing the rules from April 2015 because non-residents currently don't have to pay CGT. So I think only your accountant can know why you paid it.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/298759/CGT_non-residents_condoc.pdf

You would be classed as being exempt from CGT if you have been non-resident for 5 full tax years, that's as it stands now !

i think you'll find its if you become resident in next 5 years after becoming non resident

[Eff1n2ret]

Last month I wrote to my MP for Taunton Deane about this and he said that he would contact the Inland Revenue to find out what may happen.

I got a reply yesterday from his office which basically said that at the 2014 budget that they were consulting on wether the Personal tax allowances should be restricted for non UK residents and if so, how the restriction should be made.

The consultation will be used to help the government to understand the impact and feasability of any change. Officials will work with and note the views of all interested parties and stakeholders on the issues raised during the consultation and my comments have been noted.

So get writing to your MPs asap and make your views known.

I pointed out that if I cannot afford to live in Thailand I would bring my family to the UK and expect support from my MP in obtaining accommodation and all the allowances that I am entitled to and assistance to get my wife into the UK. My son is a dual citizen so there should be no problems with his entry.

I don't think you need to worry about this if most of your income is from the UK - say a private pension from working in the UK and state pension, they are going to apply an "economic connection rule" that basically means if say over 80% or 90% of your world income is derived earned and taxed in the UK then you will still be entitled to the PTA without change from what it is now

That is indeed the case. Like others I wrote to an MP who raises matters concerning expat pensioners in the House of Commons. He forwarded my letter to the Treasury and their reply is as follows (I omit the first few paragraphs which are just an explanation of the consultation):-

The Government wants to ensure that individuals with strong economic connections to the UK continue to benefit from our competitive tax rules and generous personal allowance. For example, individuals whose income is mainly from the UK would still be entitled to allowances in the same way as residents. A test could be introduced to identify non-residents with the strongest connections to the UK by measuring where most of their income arises. This could be set so that somebody with either 75 or 90 percent of their worldwide income coming from the UK would be entitled to the allowance.

Most UK national pensioners living overseas would not be affected by any restriction on non-residents entitlement to the personal allowance. This is because:

• Some are still resident in the UK for tax purposes and so would not be affected by any change;
• Provisions of tax treaties generally mean that UK state pension, personal pensions or private sector occupational pensions are only taxable in the recipients’ states of residence and not in the UK; and/or
• Many non-resident UK national pensioners have little or no other income so would not be affected by losing their Personal Allowance under a strong economic connections test.

I don't really understand the significance of the second bullet point, but the third makes it clear that someone like myself whose only income derives from the UK will still be entitled to the personal allowance. The test of "75 or 90 percent" simply reflects the consultation document, as they haven't yet decided on a percentage.

Anyone who thinks they might be affected should perhaps read the consultation document itself, which is here:-

https://www.gov.uk/government/consultations/restricting-non-residents-entitlement-to-the-uk-personal-allowance/restricting-non-residents-entitlement-to-the-uk-personal-allowance

The document gives a contact address to which representations can be made. I have done/

[chiang mai]

sack your accountant since your totally wrong if your non resident thetis no CGT to pay until this changes as announced inn budget from April 2015 rule is if you return to become resident within 5 years after sale then CGT tax is payable

Sack your self, it's six years! CGT doesn't kick in until the after the first three years, the last three years are excused.

[billd766]

Last month I wrote to my MP for Taunton Deane about this and he said that he would contact the Inland Revenue to find out what may happen.

I got a reply yesterday from his office which basically said that at the 2014 budget that they were consulting on wether the Personal tax allowances should be restricted for non UK residents and if so, how the restriction should be made.

The consultation will be used to help the government to understand the impact and feasability of any change. Officials will work with and note the views of all interested parties and stakeholders on the issues raised during the consultation and my comments have been noted.

So get writing to your MPs asap and make your views known.

I pointed out that if I cannot afford to live in Thailand I would bring my family to the UK and expect support from my MP in obtaining accommodation and all the allowances that I am entitled to and assistance to get my wife into the UK. My son is a dual citizen so there should be no problems with his entry.

I don't think you need to worry about this if most of your income is from the UK - say a private pension from working in the UK and state pension, they are going to apply an "economic connection rule" that basically means if say over 80% or 90% of your world income is derived earned and taxed in the UK then you will still be entitled to the PTA without change from what it is now

I get the State pension, an Armed Forces pension and a company pension, all of which are deemed to be derived from the UK and that is my total income.

My house there went in the divorce and whilst I left the UK in 1991 I was working for Motorola offshore until I quit to go self employed in 1999. That was the years I got my decree absolute and was also the year that I finally quit the UK.

I still get a self employed tax form from the UK Taxman every year (they only got it close in 1 year out of 10) which I dutifully fill in online. I got a letter ealry in 2014 demanding something over £1,xxx and called them up and wrote to them quoting their tax returns and heard nothing until early August when they demanded it again.

This time I got on my screen my letter, their letters, my tax records and called them once again. I spoke to a very nice and helpful lady and went through the last 8 years and she corrected their errors and what a surprise, they now owe me £360.

The problem was that they assumed that I got the annual pension increases which, being in Thailand I don't.

For anybody paying UK tax check this out and if they are wrong they WILL refund the overpaid tax.

my

[icare999]

sack your accountant since your totally wrong if your non resident thetis no CGT to pay until this changes as announced inn budget from April 2015 rule is if you return to become resident within 5 years after sale then CGT tax is payable

Sack your self, it's six years! CGT doesn't kick in until the after the first three years, the last three years are excused.

where on earth did you get that idea total crap sorry I've been doing property in UK for 46 years and your poster is total nonsense go check IR website unbielievable the nonsense posted here sometimes but up to you and others if they want to believe it

[chiang mai]

sack your accountant since your totally wrong if your non resident thetis no CGT to pay until this changes as announced inn budget from April 2015 rule is if you return to become resident within 5 years after sale then CGT tax is payable

Sack your self, it's six years! CGT doesn't kick in until the after the first three years, the last three years are excused.

where on earth did you get that idea total crap sorry I've been doing property in UK for 46 years and your poster is total nonsense go check IR website unbielievable the nonsense posted here sometimes but up to you and others if they want to believe it

There was a recent discussion thread on the subject of CGT for expats, what it concluded was that an expat who owns a UK property but doesn't live in it, would be liable to CGT, under the rules taking effect in 2015. The calculation for that was based on the fact that the expat had not lived in the property for three continuous years - the CGT calculation excuses the most recent three years thus making a total of six years. I will look for the thread and post it here so that you can challenge it, if you wish.

[chiang mai]

sack your accountant since your totally wrong if your non resident thetis no CGT to pay until this changes as announced inn budget from April 2015 rule is if you return to become resident within 5 years after sale then CGT tax is payable

Sack your self, it's six years! CGT doesn't kick in until the after the first three years, the last three years are excused.

where on earth did you get that idea total crap sorry I've been doing property in UK for 46 years and your poster is total nonsense go check IR website unbielievable the nonsense posted here sometimes but up to you and others if they want to believe it

Please see post 46 and the attachment therein, then read the rest of the page;

http://www.thaivisa.com/forum/topic/755897-a-heads-up-for-uk-expats/page-2

Having re-read all the above I realize that Partington corrected my understanding, the excused period is not 3 years but instead is 18 months.

[delboy]

Every year since I started to receive the State Pension, I get a tax code notification which shows that they have assumed I get the annual pension increase. I phone them on Skype and the tax code gets amended. This year I was told that they now have a method of flagging my details so that the computer knows that I get no increase.

I wait to see if it will work. However, if I lose my UK tax allowance, it doesn't matter if it works or not.

[Keesters]

Read

http://en.wikipedia.org/wiki/National_Insurance_Fund

National Insurance Fund (NIF)

The income of the NIF consist of contributions from employees, employers and the self-employed, plus interest on its investments. The NIF are used to pay for social security benefits such as state retirement pensions,...

Each year there is a surplus of the order of £2 billion

The Great Britain NIF had a surplus of over £34 billion as at 2005/06, £38 billion in 2006/7 and the Government Actuary's Department forecasts that this surplus will grow to over £114.7 billion by 2012.

This surplus figure has been revised in recent years due to errors in assumptions by the GAD and now is forecast to be just £30 billion by 2016.

Somewhere they have lost a lot of money. Where did it go? Now us pensioners in Thailand are being asked to help make up for the shortfall.

[partington]

sack your accountant since your totally wrong if your non resident thetis no CGT to pay until this changes as announced inn budget from April 2015 rule is if you return to become resident within 5 years after sale then CGT tax is payable

Sack your self, it's six years! CGT doesn't kick in until the after the first three years, the last three years are excused.

where on earth did you get that idea total crap sorry I've been doing property in UK for 46 years and your poster is total nonsense go check IR website unbielievable the nonsense posted here sometimes but up to you and others if they want to believe it

Please see post 46 and the attachment therein, then read the rest of the page;

http://www.thaivisa.com/forum/topic/755897-a-heads-up-for-uk-expats/page-2

Having re-read all the above I realize that Partington corrected my understanding, the excused period is not 3 years but instead is 18 months.

This excused period refers only to properties that are your own single designated residence - the poster that originated this debate declared that the property he was talking about was a second property that he never lived in - so this would not apply.

At present, for UK residents, gains from selling such a property would be completely liable for CGT with no exclusions, and for non-UK residents would be completely exempt from any CGT.

After April 2015 I assume non-UK residents will be completely liable for all CGT on the sale of any properties other than the one they have designated as a personal residence because they have at some time lived there.

Presumably, UK non-residents will be able to claim some of the same exclusions as a UK resident would on a their designated residence, though obviously any years other than the first three or last one and a half would get limited or no personal residence relief, depending on how long the property was occupied by the owner, if it was let and how long for, and the reasons for the owner's absence.

[chiang mai]

This excused period refers only to properties that are your own single designated residence - the poster that originated this debate declared that the property he was talking about was a second property that he never lived in - so this would not apply.

At present, for UK residents, gains from selling such a property would be completely liable for CGT with no exclusions, and for non-UK residents would be completely exempt from any CGT.

After April 2015 I assume non-UK residents will be completely liable for all CGT on the sale of any properties other than the one they have designated as a personal residence because they have at some time lived there.

Presumably, UK non-residents will be able to claim some of the same exclusions as a UK resident would on a their designated residence, though obviously any years other than the first three or last one and a half would get limited or no personal residence relief, depending on how long the property was occupied by the owner, if it was let and how long for, and the reasons for the owner's absence.

Thank you for the clarification Partington, I'm grateful.