Disadvantages of being UK tax resident and living abroad
Discussion
Hi all
Apologies for the bad wording of the thread title which I can’t edit!
I am living abroad in the EU and therefore when I next complete a SA tax return I will have been out of the UK for more than 6 months, therefore treated as non resident. I understand that I ll obviously have to pay UK tax on my UK income which is absolutely fine. Are there any nasty surprises i haven t thought about (from a UK point of view, I m aware of double taxation stuff etc). I understand I won t get child benefit any longer, but have I missed anything else?
Many thanks
Apologies for the bad wording of the thread title which I can’t edit!
I am living abroad in the EU and therefore when I next complete a SA tax return I will have been out of the UK for more than 6 months, therefore treated as non resident. I understand that I ll obviously have to pay UK tax on my UK income which is absolutely fine. Are there any nasty surprises i haven t thought about (from a UK point of view, I m aware of double taxation stuff etc). I understand I won t get child benefit any longer, but have I missed anything else?
Many thanks
I was tax resident in France for 17 years. I am sure you have the gist of what will happen.
The bit of the double taxation treaty that needed a penny to drop for us was that you need to declare and be taxed on any U.K. income, but you also declare it in the EU and get a credit for the U.K. tax paid. but still end up paying some more tax there if it is due under their tax regime. Simply, if U.K. tax is zero because of your U.K. tax allowance, you will still pay the correct full rate in the EU.
In the days when the U.K. offered significant CGT allowances, it comes as a shock to just how much tax was due in France, nonetheless.
The biggest bug was being treated as a pariah by U.K. financial institutions. We maintained a home in the U.K. just to get around this requirement.
The bit of the double taxation treaty that needed a penny to drop for us was that you need to declare and be taxed on any U.K. income, but you also declare it in the EU and get a credit for the U.K. tax paid. but still end up paying some more tax there if it is due under their tax regime. Simply, if U.K. tax is zero because of your U.K. tax allowance, you will still pay the correct full rate in the EU.
In the days when the U.K. offered significant CGT allowances, it comes as a shock to just how much tax was due in France, nonetheless.
The biggest bug was being treated as a pariah by U.K. financial institutions. We maintained a home in the U.K. just to get around this requirement.
rdjohn said:
I was tax resident in France for 17 years. I am sure you have the gist of what will happen.
The bit of the double taxation treaty that needed a penny to drop for us was that you need to declare and be taxed on any U.K. income, but you also declare it in the EU and get a credit for the U.K. tax paid. but still end up paying some more tax there if it is due under their tax regime. Simply, if U.K. tax is zero because of your U.K. tax allowance, you will still pay the correct full rate in the EU.
In the days when the U.K. offered significant CGT allowances, it comes as a shock to just how much tax was due in France, nonetheless.
The biggest bug was being treated as a pariah by U.K. financial institutions. We maintained a home in the U.K. just to get around this requirement.
Also applies to ISAs which are not generally recognised in Europe but pensions are.The bit of the double taxation treaty that needed a penny to drop for us was that you need to declare and be taxed on any U.K. income, but you also declare it in the EU and get a credit for the U.K. tax paid. but still end up paying some more tax there if it is due under their tax regime. Simply, if U.K. tax is zero because of your U.K. tax allowance, you will still pay the correct full rate in the EU.
In the days when the U.K. offered significant CGT allowances, it comes as a shock to just how much tax was due in France, nonetheless.
The biggest bug was being treated as a pariah by U.K. financial institutions. We maintained a home in the U.K. just to get around this requirement.
ISA's is a big one already mentioned.
Foreign due restrictions likely wont recognise the CGT & income tax protection an ISA gives (the US certainly doesn't, but they're particularly draconian wrt foreign accounts)
House sale - again may not affect you - but you'll lose any PRR on a primary residence if sold while abroad.
Foreign due restrictions likely wont recognise the CGT & income tax protection an ISA gives (the US certainly doesn't, but they're particularly draconian wrt foreign accounts)
House sale - again may not affect you - but you'll lose any PRR on a primary residence if sold while abroad.
Gassing Station | Finance | Top of Page | What's New | My Stuff