Sell up and move abroad to avoid paying tax ?
Discussion
Can anyone clear this up for me, I am on the verge of selling up, as my accountant says I can avoid paying tax if I leave the country and become a tax exile.
But how long have you got? a week, a month, 6 months,Has anyone done this please email me in the strictest of confidence.
Steve..
>>> Edited by stesrg on Monday 14th March 20:56
But how long have you got? a week, a month, 6 months,Has anyone done this please email me in the strictest of confidence.
Steve..
>>> Edited by stesrg on Monday 14th March 20:56
Check out the IR website for details of what constitutes residence and non-residence. This is an EXTREMELY complicated area and before making any potentially life changing moves get some DETAILED advice on the tax implications.
The basic position is that non-UK residents don't have to pay UK tax. However, defining who is a UK resident and who is not is not always clear cut. In addition, you might have to pay tax in the country you move to - unless it is a genuine tax haven (like Monaco or Jersey). And those countries are rather choosey as to who they let in.
If you go abroad but visit the UK sufficiently often enough you may find that you are still UK Resident for UK tax purposes. Under Money Laundering and Proceeds of Crime regulations the UK is authorised to obtain information about you from the authorities in many countries around the world - particularly other EU countries and/or countries where there is a Double Taxation Agrreement in force between Britain and that country (which is most developed countries).
>> Edited by Eric Mc on Tuesday 15th March 10:54
The basic position is that non-UK residents don't have to pay UK tax. However, defining who is a UK resident and who is not is not always clear cut. In addition, you might have to pay tax in the country you move to - unless it is a genuine tax haven (like Monaco or Jersey). And those countries are rather choosey as to who they let in.
If you go abroad but visit the UK sufficiently often enough you may find that you are still UK Resident for UK tax purposes. Under Money Laundering and Proceeds of Crime regulations the UK is authorised to obtain information about you from the authorities in many countries around the world - particularly other EU countries and/or countries where there is a Double Taxation Agrreement in force between Britain and that country (which is most developed countries).
>> Edited by Eric Mc on Tuesday 15th March 10:54
This is an iteresting one - I'm thinging of living abroad but still want to have my company based and operated from the UK (no international clients).
I've been trying to find out what tax implications there would be for taking an income from the UK but living in another county which in this case would be Norway.
Anyone one know any good TAX professionals that could advise as I think this is out of the relms of normal accountancy?!
>> Edited by nekrum on Tuesday 15th March 11:24
Obviously, the company would still be UK based and would therefore be fully liable to UK Corporation Tax. If you were permanently resident in Norway, you would probably escape personal UK Income Tax entirely but would, no doubt, be fully liable to Norwegian Income Tax and social insurance - which, from what I believe, is generally higher than the UK equivalent.
Norway is not part of the EU but does have a Double Taxation Agreement with the UK.
Norway is not part of the EU but does have a Double Taxation Agreement with the UK.
Eric Mc said:
Obviously, the company would still be UK based and would therefore be fully liable to UK Corporation Tax. If you were permanently resident in Norway, you would probably escape personal UK Income Tax entirely but would, no doubt, be fully liable to Norwegian Income Tax and social insurance - which, from what I believe, is generally higher than the UK equivalent.
Norway is not part of the EU but does have a Double Taxation Agreement with the UK.
Thanks for that Eric - can you explain what a Double Taxation Agreement is all about?..
In some circumstances, a person can find themselves paying tax in two (or more) different countries on the same bit of income.
A classic example would be a Norwegian resident (why not, it's relevant in this case) having a bank deposit account in the UK. The bank would automtically be deducting UK tax from any interest paid into this account. However, our Norwegian friend might also find that he was liable to Norwegian income tax on the same interest. Without a Double Taxation Agreement (DTA) between Norway and the UK, he'd suffer a double whammy.
With the DTA in place, the he would continue to pay the UK tax at source but the Norwegian authorities would allow him a tax credt for the UK tax already paid against his overall Norwegian tax bill.
Back in the 1960s, the science fiction writer Arthur C Clarke was stuffed for both UK and Sri Lankan taxes on his royalty income because a DTA did not exist between the two countries at that time.
Before emigrating anywhere it is worthwhile finding out what taxation arrangements exist between the country you are leaving (and where you may be earning some money still) and the country you are moving to.
If you own a residential property in the UK, you may want to investigate how best to handle this before you emigrate e.g. should you sell it and avail of the CGT exemption on your main home or should you retain it to generate rental income thereby perhaps generating tax on rental income (UK, Norwegian or both) and maybe comprimising the CGT position at a later date.
A classic example would be a Norwegian resident (why not, it's relevant in this case) having a bank deposit account in the UK. The bank would automtically be deducting UK tax from any interest paid into this account. However, our Norwegian friend might also find that he was liable to Norwegian income tax on the same interest. Without a Double Taxation Agreement (DTA) between Norway and the UK, he'd suffer a double whammy.
With the DTA in place, the he would continue to pay the UK tax at source but the Norwegian authorities would allow him a tax credt for the UK tax already paid against his overall Norwegian tax bill.
Back in the 1960s, the science fiction writer Arthur C Clarke was stuffed for both UK and Sri Lankan taxes on his royalty income because a DTA did not exist between the two countries at that time.
Before emigrating anywhere it is worthwhile finding out what taxation arrangements exist between the country you are leaving (and where you may be earning some money still) and the country you are moving to.
If you own a residential property in the UK, you may want to investigate how best to handle this before you emigrate e.g. should you sell it and avail of the CGT exemption on your main home or should you retain it to generate rental income thereby perhaps generating tax on rental income (UK, Norwegian or both) and maybe comprimising the CGT position at a later date.
You'll need to buy a residence in the new place not rent. 2 years is normal before coming back - need to construct the thing very carefully. Look at www.taxationweb.co.uk to start off but you need an onside accountant.
It can be done
It can be done
I always thought you had to be out of the country for 5 years .
Allowed 90 days in .
You could register your company offshore and contract yourself into it . You'd only be liable for the profits you bring on shore. It helps if you were doing work abroad to really make it work though .
Allowed 90 days in .
You could register your company offshore and contract yourself into it . You'd only be liable for the profits you bring on shore. It helps if you were doing work abroad to really make it work though .
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