Taxation - 6 Months Thailand / 6 Months Uk

[Casanundra]

As far as I understand it, as long as I stay outside the UK for 183 days in any one tax year then for tax purposes I am considered a non tax resident of the UK.

Based on this then, if I have take a fixed contract job paying 450 GBP per day for a maximum of 6 months and then depart the UK back to Thailand for the remaining 6 months of the year as well as keeping all the money earnt in an offshore account, would I be liable for tax from either the UK or Thailand on this money providing I keep it offshore?

Can anyone offer any advice or insights on this one please?

[taxexile]

check the article in the sunday times money section , november 19th , 2006.

"brown targets exodus to the sun"

"a court ruling for the taxman means the chancellor can squeeze more out of the 1m. people who have moved abroad.

thousands of british people who have moved or retired abroad could be chased for tax going back six years following a court ruling last week.

the landmark decision changed the way revenue and customs calculates whether you are deemed to be resident in britain , and therefore whether you must pay uk tax on your worldwide earnings..........etc.etc.etc."

try and locate the full article..... and weep i'm afraid.

on pounds 450 a day , expect no mercy from the government casanundra.

the limit is 90 days a year , to be strictly enforced and monitored.

[JimsKnight]

check the article in the sunday times money section , november 19th , 2006.

"brown targets exodus to the sun"

"a court ruling for the taxman means the chancellor can squeeze more out of the 1m. people who have moved abroad.

thousands of british people who have moved or retired abroad could be chased for tax going back six years following a court ruling last week.

the landmark decision changed the way revenue and customs calculates whether you are deemed to be resident in britain , and therefore whether you must pay uk tax on your worldwide earnings..........etc.etc.etc."

try and locate the full article..... and weep i'm afraid.

on pounds 450 a day , expect no mercy from the government casanundra.

the limit is 90 days a year , to be strictly enforced and monitored.

G Brown has got a lot to answer for!

UK is the most taxed place on the planet, Norway and Sweden might be higher but they don't get sht like 90 day limits put on them and worldwide taxation! He'd tax fresh air if he could get away with it!

[Casanundra]

check the article in the sunday times money section , november 19th , 2006.

"brown targets exodus to the sun"

"a court ruling for the taxman means the chancellor can squeeze more out of the 1m. people who have moved abroad.

thousands of british people who have moved or retired abroad could be chased for tax going back six years following a court ruling last week.

the landmark decision changed the way revenue and customs calculates whether you are deemed to be resident in britain , and therefore whether you must pay uk tax on your worldwide earnings..........etc.etc.etc."

try and locate the full article..... and weep i'm afraid.

on pounds 450 a day , expect no mercy from the government casanundra.

the limit is 90 days a year , to be strictly enforced and monitored.

G Brown has got a lot to answer for!

UK is the most taxed place on the planet, Norway and Sweden might be higher but they don't get sht like 90 day limits put on them and worldwide taxation! He'd tax fresh air if he could get away with it!

Cripes... the reason I left the UK in the first place was because I was paying too much tax and now he wants to try and tax me on money earned offshore as well and yet not allow me to reap the benefits that being a tax holder gives like street lights, nice pavemets, police and firemen and so on and on... If I am not in the UK using these facilities he can go and get stuffed and i'll just stay clear of the UK for ever and ever amen. Anyone got any contacts in the cayman islands?

Edited December 8, 2006 by Casanundra

[taxexile]

dont be so uncharitable casanundra ,

gordon brown needs your money to pay for such worthy causes as the one below , remember .... there are people less fortunate than yourself.

some poor high risk child rapist could go without his compensation if you avoid paying your taxes.

have a heart man.

Rapist wins pay-out over unlawful detention By Daily Telegraph Correspondent

Last Updated: 1:57am GMT 08/12/2006

A "high risk" child rapist is to receive thousands of pounds in damages for "unlawful detention" while held pending deportation to Somalia, a High Court judge ruled yesterday.

The failed asylum seeker, who cannot be named and is referred to only as "A", is threatened with removal after serving an eight-year prison sentence for attacking and sexually assaulting a 13-year-old girl.

But yesterday Mr Justice Calvert Smith ruled that there was a period between Dec 3 2004 and July 20 2006 when the 31-year-old's detention became unlawful, entitling him to compensation.

advertisementThe actual award will now be assessed, although human rights lawyers estimate it could be up to £50,000.

Mr Justice Calvert Smith, sitting in London, said the detention became unlawful because of "its sheer length, the impossibility during that period of achieving removal, and statements which misled decision makers both inside and outside the Immigration and Nationality Department".

Forced removals to Somalia became possible in July this year after an airline agreed to take failed asylum seekers and other deportees.

The judge said there had also been a failure to consider releasing "A" with the safeguard of electronic tagging, which had become a possibility from July 2005.

The judge said "a powerful factor" against "A" being entitled to damages was that he had been fighting to remain in the UK "by hook or by crook" and refused to fly back to Somalia voluntarily, something the Home Office said he could have done at any time.

But that factor was not sufficient to displace the illegality of his detention.

The judge rejected A's argument that he was not now entitled to release on bail, saying his deportation could take place within a reasonable length of time. It was not necessary for him to stay in this country while his damages were assessed.

But it was revealed that "A" is to launch a further judicial review application against the current attempts to deport him.

Despite media requests that his identity be revealed given his serious criminal record, the judge said that "A" must follow a Court of Appeal practice direction which states that cases involving asylum seekers must be anonymous, and identities never revealed, as that was "the universal practice" in other European courts.

Naming him could also hamper the Home Office attempts to deport him.

"A", who appeared in court flanked by security guards, first arrived in the UK in May 1995.

He completed his eight-year prison sentence for rape more than three years ago, but continued to be detained under immigration laws as the Government attempted to arrange for his removal.

Edited December 8, 2006 by taxexile

[briley]

You are non-resident for tax in the UK if you are in the UK for less than 183 days in any one tax year or less than an average of 91 days over the past 4 years. So you can't spend half a year in the UK every year and be treated as non-resident for tax.

First year of non-residence is treated differently.

Taxexile _ I'd be interested in what court ruling, can't access the Sunday Times archive without paying. Any further details?

[taxexile]

I'd be interested in what court ruling, can't access the Sunday Times archive without paying. Any further details?

the article didnt actually give the court reference number or whatever they use , it interviews expats and accountants and gives a couple of case histories of people caught up in the days spent rule.

it is no more than 90 days / year on average in the uk over a 4 year period , and less than 183 in any one tax year.

the article says that the revenue will be looking closely at businessmen , not just millionaires , who work abroad and return regularly to britain.

"martin rimmer , of the fry group of accountants , said "the upshot is that revenue and customs seem to be adopting a much stricter attitude towards endorsing expatriate status and the guidance provided by its own publications can no longer be relied upon. saving uk tax by moving abroad is going to become much more difficult and the taxman is likely to continue to pay greater attentionto people wanting to adopt residence status."

it advises expats to keep ailine ticket stubs and diaries so that they have records of days spent in the uk , and now the will include the day of arrival and departure as full days spent in the uk .

[Casanundra]

I'd be interested in what court ruling, can't access the Sunday Times archive without paying. Any further details?

it is no more than 90 days / year on average in the uk over a 4 year period , and less than 183 in any one tax year.

the article says that the revenue will be looking closely at businessmen , not just millionaires , who work abroad and return regularly to britain.

Ah sooo, well as long as one doesn't regularly go back to the UK then one will be ok and as long as the funds remain offshore for 1 year then no tax is due in Thailand either.

Hmmmm I wonder if I can fit a four country shuffle in amongst all of these rules and just keep rotating...

[Axel]

Remember Boris Becker, the tennis guy?

He had a great fan who noted down, whenever he saw Boris, which proffed far more than 183 days in Germany. These notes ended up somehow with the tax-office. That was blo0dy expensive finally.

[sumrit]

Has any body any idea where I would stand on this issue? Because of health reasons my company won't let me work anymore so the company pension scheme pays me 50% of my salary and I don't have to work.This money is paid to the company, who still employ me, and they pay me monthly as a salary. I pay tax and N.I. on this in the normal (paye) way. I am currently living in Thailand with my (thai) partner and intend staying here permantly with the occasional visit back to the UK. If I keep my visits down to less than 90 days per year will I be able to claim back the tax I've paid on my salary through paye?

[DD18]

http://business.timesonline.co.uk/article/...2459575,00.html

Link to the article.

http://business.timesonline.co.uk/article/...2459577,00.html

This is another interesting one on inheritance tax

[briley]

Sumrit - AFAIK you earn the money in the UK so pay tax in the UK even if non-resident. However if you are non-resident you don't have to pay tax on any money earned outside the UK. But be carefull that you don't lose your personal allowance by being non-resident.

I used to know the rules about that but recent events leave me being uncertain as to who get a personal allowance, that is the first £5,000 or so of income is tax free.

DD18 - the inland revenue has always said that excluding day of arrival and day of departure was a concession and not a right. If you only visit the UK once or twice a year then I suspect these days will be ignored but the case in question was someone visiting the UK over 24 times a year. There was also the possibility of someone living in, say, France but working in the city and technically never spending a day in the UK as they never visit for over 2 days at a time.

Edited December 8, 2006 by briley

[libya 115]

NON DOMICILE

If you have no property or bank accounts or any links whatsoever within the U.K. then you can be considered for 'Non Domicile' status.

Even the Inland Revenue won't tell you the full rules, but if you can prove it, then you will be tax free forever including IHT.

[sumrit]

Sumrit - AFAIK you earn the money in the UK so pay tax in the UK even if non-resident. However if you are non-resident you don't have to pay tax on any money earned outside the UK. But be carefull that you don't lose your personal allowance by being non-resident.

I thought this was the case but it was worth asking anyway.Thanks for the promt reply.

[taxexile]

including IHT.

are you sure about the IHT.

as either an expat or resident , if part of a uk estate is willed to you then i am pretty sure that tax will have to be paid before you can claim the loot.

as far as a non resident willing assets from abroad to a uk resident , then i think tax will still have to be paid by the recipient.

can anybody throw some light on this ?

[JimsKnight]

On what Libya says, I'd be very unwilling to close accounts in the UK just to get Non Dom. The interest you get in the UK on funds etc blows thailand away and is what many expats survive on out here.

But its not time for revolution and uprising just yet, the one thing you have to remember is that to be caught by the tax man you have to be really unlucky, my insider estimates less than 10% of tax returns are even checked. As the population grows the net gets easier to swim through unless they up the levels. The worse they can do is make you do jail time, which, unless you are Mr Big doing big time tax evasion you'll likely only get a couple of years if that.

You pay what tax is owed and thats it, start again folks. Its unlikely to break the bank.

The whole decision is yet another sign that labour are communist in certain areas and want to have dominating total control over the UK people.

[kudroz]

As far as I understand it, as long as I stay outside the UK for 183 days in any one tax year then for tax purposes I am considered a non tax resident of the UK.

Correct, but you also need not to be "domiciled" in the UK. Your domicile will generally be the place of you vital interests.

The statement you've made above applies to your Worldwide source income. UK source income will still be taxable regardless how many days you spend outside of the UK. Your income will generally be considered UK Source if the location of the activity for which the payment is being made is in the UK.

Based on this then, if I have take a fixed contract job paying 450 GBP per day for a maximum of 6 months and then depart the UK back to Thailand for the remaining 6 months of the year as well as keeping all the money earnt in an offshore account, would I be liable for tax from either the UK or Thailand on this money providing I keep it offshore?

If you will be executing your employment in the UK, it will be UK source income and you are liable to pay taxes in the UK.

[RAZZELL]

As far as I understand it, as long as I stay outside the UK for 183 days in any one tax year then for tax purposes I am considered a non tax resident of the UK.

Correct, but you also need not to be "domiciled" in the UK. Your domicile will generally be the place of you vital interests.

The statement you've made above applies to your Worldwide source income. UK source income will still be taxable regardless how many days you spend outside of the UK. Your income will generally be considered UK Source if the location of the activity for which the payment is being made is in the UK.

Based on this then, if I have take a fixed contract job paying 450 GBP per day for a maximum of 6 months and then depart the UK back to Thailand for the remaining 6 months of the year as well as keeping all the money earnt in an offshore account, would I be liable for tax from either the UK or Thailand on this money providing I keep it offshore?

If you will be executing your employment in the UK, it will be UK source income and you are liable to pay taxes in the UK.

Interesting...what about if you live and work in Thailand for UK companies and get paid into a UK bank account?

Only physically entering the uk for less than the 183 days or 90 days?

[kudroz]

Interesting...what about if you live and work in Thailand for UK companies and get paid into a UK bank account?

Only physically entering the uk for less than the 183 days or 90 days?

Then it would be Thai source income because you are physically located in Thailand and you are "producing" income here. So you're liable to pay taxes here. (and can be liable in the UK if you have a domicile there)

But it's a gray area because the labor office and the tax authorities are far from being educated and able to understand their own tax laws and apply them.

[balnacoil]

Here's an odd ball one:

I live in Thailand but I work in abroad (not UK) on a rotation basis I also spend just less than 180 days in Thailand/year. I pay tax in the country I work in (circa 20%) through the company, however, I get paid into my UK bank. I have declared non-resident status in the UK and I am in Thailand on a non immigrant type O (marriage visa). Am I liable to further tax either in the UK or Thailand? Thanks

[kudroz]

Here's an odd ball one:

I live in Thailand but I work in abroad (not UK) on a rotation basis I also spend just less than 180 days in Thailand/year. I pay tax in the country I work in (circa 20%) through the company, however, I get paid into my UK bank. I have declared non-resident status in the UK and I am in Thailand on a non immigrant type O (marriage visa). Am I liable to further tax either in the UK or Thailand? Thanks

UK Taxation:

If you are a non resident of the UK and do not have a domicile in the UK (vital interests like dependents, etc) you are not liable to pay taxes in the UK on your worldwide source income.

TH Taxation:

If you are present less than a aggregated period of 183 days per calendar year in Thailand, you are not a resident for tax purposes. Therefore you are liable to pay taxes only on your Thai source income.

So in your case, you income seems to be sourced in Circa and you are paying taxes there. So you're in the clear with the TH taxation, and you are clear with UK taxation as long as you remain a non-resident and you have no domicile in the UK.

[briley]

As a comment you can be non-resident for tax purposes in all countries of the world. I have been, on a number of occasions, non-resident for tax purposes in the UK whilst not being resident for tax in any other country either. But that doesn't mean I didn't pay any tax!

Domacility is another ball game and every country has very widely differing rules. UK says you are UK domiciled if born in the UK and it is very hard to lose this domicility. Inland revenue will only confirm your domicity when you try to claim tax excemption as non-domiciled. As the biggest benefit of claiming to be non-domiciled is no inheritance tax it is difficult to change things if inland revenue rules against you!

For a British national born in the UK or of British parents then domicility has virtually no effect on liability to tax in the UK.

Note that this is a gross simplification of the law/rules.

[Casanundra]

I was informed the other day by a tax lawyer from Queen Mary University of London that providing you work in the UK as a self employed person working on a contract for no more than 183 days in any one tax year (or an avg of 90 days over 4 years) and are residing in say Thailand that you won't have to pay any tax on the income you earned in the UK.

In addition to that, by throwing the money offshore for a tax year and not bringing it into Thailand would also mean that you won't have to pay any tax on it in Thailand either.

So the question is, has he pointed out a loop hole or has he misinterpeted the law in some obscure way?

[briley]

Look for a new tax lawyer.

[kudroz]

I was informed the other day by a tax lawyer from Queen Mary University of London that providing you work in the UK as a self employed person working on a contract for no more than 183 days in any one tax year (or an avg of 90 days over 4 years) and are residing in say Thailand that you won't have to pay any tax on the income you earned in the UK.

In addition to that, by throwing the money offshore for a tax year and not bringing it into Thailand would also mean that you won't have to pay any tax on it in Thailand either.

So the question is, has he pointed out a loop hole or has he misinterpeted the law in some obscure way?

If you do as he says, you are right that you won't be resident in the UK for tax purposes. But, it doesn't matter to you because you are receiving UK source income (and this is taxable regardless of your tax residence).