When do I become a UK non resident

[wordchild]

https://www.gov.uk/government/collections/finance-bill-2016. Here is the link to the draft legislation ( just out).

[wordchild]

https://www.gov.uk/government/collections/finance-bill-2016. Here is the link to the draft legislation ( just out).

From my first quick scan it seems pretty clear that the new dividend tax will apply to UK residents only, that's as expected but there was a view, from some quarters, that it might be expanded more widely. So a minor "phew" so far.

[KittenKong]

I read the notes about the draft changes and my understanding is:

Dividend income treatment for non-residents with no taxable UK income: no change and no extra liability.

Deposit interest treatment for non-residents with no taxable UK income: no change except that the R105 will cease to exist and all interest will be paid gross automatically (with reporting to HMRC).

If so, it suits me and was what I was expecting.

[OJAS]

Another future disadvantage will be the governments intention to abolish non residents uk personal allowance due in 2017 any uk income will be taxed starting from zero

I think they scraped that ideal

http://www.telegraph.co.uk/finance/personalfinance/expat-money/11272572/Expats-will-keep-their-tax-break.html

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But maybe not entirely - the Telegraph article does include the following paragraph which sounds ominous (on the basis of the words which I have indicated in bold):-

"However, in his Autumn Statement yesterday, the Chancellor said there will be no change for the time being to the current rules governing an individual’s entitlement to the allowance."

Yes you are right it dose say that but I am sure I read it somewhere else but couldn't fine the right Website, also I can't find anything after 2014 which says they are thinking about

So I hope they have scraped it

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I share your hope that this proposal has been booted into the long grass never to see the light of day ever again. To expect us expat retirees to increase our "subsidy payments" to UK plc by around £10,000 per annum is really IMHO taking the mickey, particularly bearing in mind our non-eligibility for State Pension increases and (now) free NHS treatment back home. In addition, we are not, of course, making any calls on the OAP winter fuel allowance or free bus pass budgets!

Edited December 11, 2015 by OJAS

[Ricardo]

I share your hope that this proposal has been booted into the long grass never to see the light of day ever again. To expect us expat retirees to increase our "subsidy payments" to UK plc by around £10,000 per annum is really IMHO taking the mickey, particularly bearing in mind our non-eligibility for State Pension increases and (now) free NHS treatment back home. In addition, we are not, of course, making any calls on the OAP winter fuel allowance or free bus pass budgets!

"our "subsidy payments" to UK plc by around £10,000 per annum"

The cost would only be the tax (at whatever rate-band) on the stolen-allowance, so a few grand, not the full amount of 10k.

But it would certainly be a wretched thing to do, and I suspect that the EEC would take a very dim view, of the UK treating its citizens differently for tax-purposes like that.

Then again there's the way they treat frozen/unfrozen pensioners, so they have form, at being biased & unfair.

[OJAS]

"our "subsidy payments" to UK plc by around £10,000 per annum"

The cost would only be the tax (at whatever rate-band) on the stolen-allowance, so a few grand, not the full amount of 10k.

Many congratulations on spotting my "deliberate mistake"!

Of course, our "subsidy payments" to UK plc would only increase by £2,000 for the 2015-16 tax year - assuming, of course, that our total gross UK-derived income was still taxable in its entirety at the standard rate after the £10,000 personal allowance had been discounted.

[partington]

Yeah, would only do that as long as it took to sell the property without having to pay any CGT & was joking (saber rattling) about claiming JSA, have never claimed a penny in benefits as I'm from the old school that would only claim them because they needed them, not because they can.

You have to pay CGT on a house for any periods that you have not occupied it as your main residence for the time you have owned it. There is a calculation that allows you to eliminate a portion of the capital gains tax due for any periods that you have rented it, which is complex to say the least.

If you are renting then you have told the tax authorities that you are renting and therefore they already know it cannot be your main residence and that you have not been occupying it, so it will be impossible to try to claim that it was your residence when selling, and get full CGT exemption.

In summary, even if you only own one house and you go back to live in it, you owe CGT on the gains pro rated for any periods that you were not living in it, with a reduction in tax owed (not elimination of tax owed) for periods that it was let to tenants. Added: working abroad would excuse you from the CGT for the period you were working as long as the house wasn't let.

Just a heads up, as I too wasn't aware of this until recently.

EDIT: here's a link to start you off on working out how much CGT you would be liable for

http://www.theguardian.com/money/2014/aug/21/capital-gains-tax-on-let-property

Edited December 12, 2015 by partington

[awayego]

Dose anyone know when I become a UK non resident?

I left the UK in October 2014 but I don't know when I become a non resident

I still do a tax return for the UK as I have some rental income

I was told if I spend one full tax year outside I become a non resident is this true?

Is there a way I can check someone I can

phone in the UK?

Thanks for any help

To put it simple, don't notify the UK authorities that you no longer reside in the UK, otherwise you will soon find out that you are a second class citizen.

Absolutely correct!

Far be it for me to suggest breaking UK law but declaring myself non-resident to HMC&R was the biggest mistake I made ten years ago.

If I was in that position now there would be no way that I would tell them I was non-resident - the loss of rights as well as

financial benefits (frozen state pension for one) far outweighs the risk of being 'found out' and associated penalties.

It is still an option, though not attractive for the time being, to return to the UK, re-establish residence and claim every conceivable benefit I could, having paid a working lifetime of taxes and Nat Ins contributions.

Contrast that with the multitude of benefits claimants who have made little or no contribution to the UK Exchequer, quite apart from economic immigrants from almost every corner of the world seeking a 'better life', often at taxpayers' expense.

And I can't enjoy retirement in my chosen country of residence without losing out?

[cyberfarang]

I think you become a UK non resident after 6 months out of an EEC country and have to be 6 months back in the UK again to get it back again, then after 25 years you lose UK residency completely.

[chiang mai]

Read the content of the link

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt

Thanks for that but it looks very complicated lol

It's a 105 pages

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Does your mum know you're not in your room!

Here, this version doesn't have pictures but it might be easier for you!

http://www.cambridgetax.co.uk/ctp/New_Residence_Rules.html

[chiang mai]

I think you become a UK non resident after 6 months out of an EEC country and have to be 6 months back in the UK again to get it back again, then after 25 years you lose UK residency completely.

I think you should lay off whatever you're inhaling, your answer is far more than just wrong or incorrect, it's into pantomime territory.

[jacky54]

Does your mum know you're not in your room!

Here, this version doesn't have pictures but it might be easier for you!

http://www.cambridgetax.co.uk/ctp/New_Residence_Rules.html

I think we can do without the childish jibes thank you

[Pdavies99]

Effectively it is up to the inland Revenue if you mean "Non Resident For tax Purposes"

You have to demonstrate to the UK Inland Revenue that you are resident abroad and have little or no ties to UK, however retaining UK property is often an issue, likewise you are possibly NOT a Thai resident, merely on Visa's and as such cannot demonstrate you have residence in Thailand, it will help if you register for tax in Thailand, even if you pay nothing.

Eventually the Inland Revenue will tell you when they consider you non resident for Tax Purposes, (You can ask) but you will always be liable to Income Tax on employment and property income in the UK.

All this info can be found on the Inland Revenue web site.

https://www.gov.uk/government/organisations/hm-revenue-customs

[chiang mai]

No it is not up to the Revenue, the rules are finally very very clear, following the Gainnes Cooper case:

http://www.grantthornton.co.uk/en/insights/uk-residency-test-and-tax-bills-loom-for-british-expats-as-gaines-cooper-loses-case/

The residency rules are now explicit and clear, as, once again, are to be found here:

http://www.cambridgetax.co.uk/ctp/New_Residence_Rules.html

[chiang mai]

Does your mum know you're not in your room!

Here, this version doesn't have pictures but it might be easier for you!

http://www.cambridgetax.co.uk/ctp/New_Residence_Rules.html

I think we can do without the childish jibes thank you

[Jonmarleesco]

The rules have changed, changed, and changed again. It's more a question of when you are considered resident in the UK. There is now a formula for working that out, which includes property for use in the UK, but the DWP still seem to recognise the earlier criteria, wherein you couldn't spend more than 180(2) days per tax year in the UK, with no more than 90(1) consecutively, and an average of no more than 90 per tax year over any consecutive 4-year period.

[cyberfarang]

I think you become a UK non resident after 6 months out of an EEC country and have to be 6 months back in the UK again to get it back again, then after 25 years you lose UK residency completely.

I think you should lay off whatever you're inhaling, your answer is far more than just wrong or incorrect, it's into pantomime territory.

I said I think it is. The rules have changed so much over the years I lose track. So enlighten us oh great know all, share us your wisdom.

[huawei]

No it is not up to the Revenue, the rules are finally very very clear, following the Gainnes Cooper case:

http://www.grantthornton.co.uk/en/insights/uk-residency-test-and-tax-bills-loom-for-british-expats-as-gaines-cooper-loses-case/

The residency rules are now explicit and clear, as, once again, are to be found here:

http://www.cambridgetax.co.uk/ctp/New_Residence_Rules.html

Very useful.

[chiang mai]

I think you become a UK non resident after 6 months out of an EEC country and have to be 6 months back in the UK again to get it back again, then after 25 years you lose UK residency completely.

I think you should lay off whatever you're inhaling, your answer is far more than just wrong or incorrect, it's into pantomime territory.

I said I think it is. The rules have changed so much over the years I lose track. So enlighten us oh great know all, share us your wisdom.

Go back and read post 74 again.

[chiang mai]

The rules have changed, changed, and changed again. It's more a question of when you are considered resident in the UK. There is now a formula for working that out, which includes property for use in the UK, but the DWP still seem to recognise the earlier criteria, wherein you couldn't spend more than 180(2) days per tax year in the UK, with no more than 90(1) consecutively, and an average of no more than 90 per tax year over any consecutive 4-year period.

Read post 74 again.

[jinners]

It is d_mn complicated! It's beyond the realms of simple internet forum advice because relaible advice would need full details of your finances, personal status, travel history etc and you aint gonna be prepared to post that in public!

If you can't put in the reading (and re-reading) you'll need to pay for advice unfortunately.

You will still be paying tax/doing tax returns in respect of any UK source income (unless you have a simple situation, like pension-only); achieving non-resident status does not remove the need to pay all taxation. Indeed my first question would be why do you need to attain non-resident for tax purposes status anyway? If you had CGT liabilities in the UK or substantial investment income arising in the UK, or substantial earnings here in Thailand I could understand the need, but for the average expat who retires here with insubstantial income-earning assets and a pension there is no benefit - indeed there are disadvantages in areas of health access and banking.

[Retired Chartered Accountant]

Actually I don't want to become a non resident

I just want to know when I become one because my next question was about if I am entitled to the NHS still?

I still sort of a have a UK address all my post goes to my sisters house

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If you don't want to become one then what's the fuss? Just keep your mouth shut. I've been in and out of the UK for lengthy periods of time over the preceding years. But because I maintained a UK address (as you do) a bank account (as you do) and pay taxes on rental income (as you do) there's never been a hint of a problem. So why cause one by raising a giant red flag??

[jippytum]

You will not be a permanent non resident of the UK if you have any financial connections eg UK bank accounts,investments or property etc.

I had a long battle with HMCR to become a permanent non resident of the UK some years ago. I still pay UK tax less the personal allowance on income derived from the UK. However any gains or Interest received from offshore accounts or other investments outside the UK for are not now liable for any UK tax . If you are not granted permanent non resident status you will have to provide a mountain of paperwork in every given tax year to prove you where non resident for every period of every year you claim to be non resident. immigration in the UK did not stamp passports for UK citizens arriving or departing at that time.HMCR requested sight of every page of every passport issued to me to prove during the previous six years I had resided permanently in Thailand. This information was sent by courier to verify my non resident declaration.

My advice unless it is really worth your while financially to reduce your tax liability don't bother.

[jesimps]

Does anyone else think it's about time they lumped everything together and you became either resident or non-resident for everything?

Seems to me like they deem you resident for anything of advantage to the exchecker but non-resident for anything that would benefit you.

I'm no longer considered a resident of the UK and can't get residency here, so where am I resident?

By the way, I paid the full NHS contrbutions before retirement and pay full UK tax still. I know, it matters not, just having a rant about the injustice of it all.

Edited December 12, 2015 by jesimps

[laislica]

It's different for the different services...

- For NHS it's normally 3 months... http://www.housingcare.org/downloads/kbase/2040.pdf...

"Chapter 9: returning to the UK – health servicesPeople who do not live permanently in the UK are not automatically entitled to free NHS hospital treatment, even if they have a British Passport or have lived in the UK and paid National Insurance and taxes in the past.If you have lived abroad for more than three months (or six months for pensioners living in another EEA member state), you may lose your entitlement to free NHS treatment until you can show evidence that you intend to resettle in the UK"

- For CGT it's 5 complete Tax Years (I.e. if you left the UK in Oct 2014, you'll have completed 1 year on 5th April 2016 & will still be liable for CGT on assets you owned before Oct 2014 until 5th April 2020... NB your property is different, from April 2015 you're liable for CGT on it when you come to sell even if you've been abroad for more than 5 years... CGT is a lot more complicated than this & there's things like tapering relief to take into consideration but hopefully this answers the "How Long" question.

- Non-Residential Landlord status can be applied for the following Tax Year after leaving the UK, this simply states that the Agent can pay you your rent without holding back the Tax element.

Other things to consider... Technically ("Legally") you cannot...

- Drive on your UK license abroad after 6-24 months (depending on the country), you should either convert it to a local license or get an International Driving Permit

- Drive on your UK license in the UK (you should use the license you've converted to or the IDP).

- Renew your UK Driving License (have to have a UK address that you're resident at, which you're not so you either can't or need to make a false declaration)

- Add any funds to an ISA

- Participate in any government share offerings (Lloyds, Royal Mail etc...).

I expect comments about how the above is rubbish & how people have kept an address in the UK or used their sisters address, I'm just sharing what the rules/law says, if you want to ignore/circumnavigate them... "Up to you"

Wow thanks for all your help a lot to consider

I have been outside the UK before for up 2 nine months, and gone back no problem

So I hope it will be OK I herd they are changing the rules so was wondering

I just wonder now if the NHS would even know

And I was working before and will be working in the future so I am sure it will be OK

Thanks a lot

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Back in 2000, a 50+ Brit Lady who has a prosthesis following a cancer op went for a checkup at her Dr's.

She mentioned she would be holidaying in Spain for 6 months.

The receptionist promptly removed her from the Dr's patient list.

So, she returned a while later and re-registered with her Dr.

After that she "failed" to mention anything about leaving the country and had no further problems.

After a few years I hit 65 retirement age (we were partners at that time) I applied for a form S1 to transfer my NHS resources to Spain.

Her details were added on the back of my form, I am 7 years older than her.

The international pensions dept sent the S1 forma and we registered with the Spanish NHS.

They use a chipped card which shows what level of payment you make for prescriptions.

The chip contacts a central database and the chemist can see what prescriptions you need, paperless, wonderful.

If I return to visit the UK I take a EHIC card - for temporary use of the NHS.

Originally, Spain issued the card but the rules changed and the home country has to issue the card.

I still pay taxes in the UK on pensions and income from stocks and shares.

I have no other assets in the UK

I phoned the UK Tax man and asked if I could be regarded as non resident for tax purposes.

The lady said no, so I spoke to a supervisor who said yes but......

I was to go to the Spanish tax man, register and declare all income and pay taxes there. Get a certificate and send it to the UK - job done.

Years ago, The Spanish tax was less than in the UK but times have changed, now more so I continue to pay tax to the UK.

I make an annual tax report in Spain and pay a tiny property tax cos I own a flat there.

I guess you are operating on the old:-

Don't ask, don't tell.

What they don't know won't hurt....

OK till not OK....

Just sayin

[chiang mai]

You will not be a permanent non resident of the UK if you have any financial connections eg UK bank accounts,investments or property etc.

I had a long battle with HMCR to become a permanent non resident of the UK some years ago. I still pay UK tax less the personal allowance on income derived from the UK. However any gains or Interest received from offshore accounts or other investments outside the UK for are not now liable for any UK tax . If you are not granted permanent non resident status you will have to provide a mountain of paperwork in every given tax year to prove you where non resident for every period of every year you claim to be non resident. immigration in the UK did not stamp passports for UK citizens arriving or departing at that time.HMCR requested sight of every page of every passport issued to me to prove during the previous six years I had resided permanently in Thailand. This information was sent by courier to verify my non resident declaration.

My advice unless it is really worth your while financially to reduce your tax liability don't bother.

Not true, it's totally acceptable to be UK non-resident for tax purposes and still have a UK bank account, I have both, non-residency status and bank accounts (and credit cards, and shares, and pensions, and onshore investments). A link to the tax residency rules are set out in several posts in this thread.

[chiang mai]

Does anyone else think it's about time they lumped everything together and you became either resident or non-resident for everything?

Seems to me like they deem you resident for anything of advantage to the exchecker but non-resident for anything that would benefit you.

I'm no longer considered a resident of the UK and can't get residency here, so where am I resident?

By the way, I paid the full NHS contrbutions before retirement and pay full UK tax still. I know, it matters not, just having a rant about the injustice of it all.

They have lumped everything together, Tax, benefits, NHS, the criteria for elligibilty is very nearly the same for all of them.

[KittenKong]

You will not be a permanent non resident of the UK if you have any financial connections eg UK bank accounts,investments or property etc.

I had a long battle with HMCR to become a permanent non resident of the UK some years ago. I still pay UK tax less the personal allowance on income derived from the UK. However any gains or Interest received from offshore accounts or other investments outside the UK for are not now liable for any UK tax . If you are not granted permanent non resident status you will have to provide a mountain of paperwork in every given tax year to prove you where non resident for every period of every year you claim to be non resident. immigration in the UK did not stamp passports for UK citizens arriving or departing at that time.HMCR requested sight of every page of every passport issued to me to prove during the previous six years I had resided permanently in Thailand. This information was sent by courier to verify my non resident declaration.

My advice unless it is really worth your while financially to reduce your tax liability don't bother.

Not true, it's totally acceptable to be UK non-resident for tax purposes and still have a UK bank account, I have both, non-residency status and bank accounts (and credit cards, and shares, and pensions, and onshore investments). A link to the tax residency rules are set out in several posts in this thread.

Indeed. I have a dozen UK bank accounts yet I havent lived there for nearly 40 years. In those 40 years I never had to submit any paperwork at all to prove non-residency. I used to claim withholding tax back but now I get interest paid gross and dont need to. I dont fill in a tax return at all as HMRC said I didnt need to years ago (no taxable income).

[KittenKong]

I'm no longer considered a resident of the UK and can't get residency here, so where am I resident?

Tax residency has nothing to do with having Thai permanent residency. Thai PR is to do with immigration.

You become tax resident in Thailand simply by living here for more than half the year, or by having taxable income here. As a (tax) resident in Thailand you should complete a Thai tax return.

[chiang mai]

I'm no longer considered a resident of the UK and can't get residency here, so where am I resident?

Tax residency has nothing to do with having Thai permanent residency. Thai PR is to do with immigration.

You become tax resident in Thailand simply by living here for more than half the year, or by having taxable income here. As a (tax) resident in Thailand you should complete a Thai tax return.

Even if it's a nil return?

[laislica]

You will not be a permanent non resident of the UK if you have any financial connections eg UK bank accounts,investments or property etc.

I had a long battle with HMCR to become a permanent non resident of the UK some years ago. I still pay UK tax less the personal allowance on income derived from the UK. However any gains or Interest received from offshore accounts or other investments outside the UK for are not now liable for any UK tax . If you are not granted permanent non resident status you will have to provide a mountain of paperwork in every given tax year to prove you where non resident for every period of every year you claim to be non resident. immigration in the UK did not stamp passports for UK citizens arriving or departing at that time.HMCR requested sight of every page of every passport issued to me to prove during the previous six years I had resided permanently in Thailand. This information was sent by courier to verify my non resident declaration.

My advice unless it is really worth your while financially to reduce your tax liability don't bother.

I believe that it is possible to show the taxman that you live outside the UK and he will "let you go" tax wise BUT, the moment that they realise that you reside in Thailand, your state pension will be frozen at what ever level it is when they find out.

You can have the money sent to your Thai bank every 4 weeks and they will take all the costs involved, you will get the bank rate of the day.

You do not need to be a Resident Of Thailand to do this.

You only have to show that you do not reside in the UK and that any visits are less than about 15 days per year (Not sure, check)

Injustice? An Aussy married a younger Thai lady and took her "back home" to Melbourne.

After registering her at the town hall, his pension was halved!

On checking, he found out that since she was not yet at pension age, she was expected to work to support him.....

I read this on a thread on TV a couple of years or so ago!

Back to your quote, I agree that unless you will make huge tax savings, it's not worth the hassle.