Expat Status - home in UK not rented

Expat Status - home in UK not rented

Author
Discussion

jinkster

Original Poster:

2,242 posts

156 months

Monday 18th August 2014
quotequote all
Is it possible to declare expat status and pay no tax in the UK if I own a property which is not rented and available to live in. I am moving out to Qatar in November and looking at keeping the house available as my Mrs wants to do 2 weeks in Qatar and 2 weeks in the UK. Will I be eligible to pay tax in the UK because of this?

Thanks.

Olf

11,974 posts

218 months

Monday 18th August 2014
quotequote all
You need to get proper advice but I did the expat thing and went through all the tax stuff and my view would be that whether you are caught by UK income tax is all about YOUR residency status and nothing to do with your wife or your UK based assets.

Eric Mc

121,941 posts

265 months

Tuesday 19th August 2014
quotequote all
I presume you are talking about Capital Gains Tax if the UK house is sold?

If the house isn't sold, there will be no UK tax - apart from Council Tax - which you may be able to get reduced if the house is unoccupied.

schmunk

4,399 posts

125 months

Tuesday 19th August 2014
quotequote all
Assuming you're talking about income tax, it will depend on what you're doing in Qatar.

If you're working outside the UK full time (35+ hours per week), and it will be for a period covering at least a complete UK tax year (6 April to 5 April), then all you need to do is limit your UK presence to no more than 90 days per tax year (counted by presence in the UK at midnight at the end of the day) and UK workdays to no more than 30 days (where 3 hours spent working in the UK in a day counts as a workday). Having a house / wife / family / bank accounts / etc. in the UK has no impact. NB with this test you can split the tax year into resident and non-resident parts - the day counts are pro-rated to the non-resident part.

If you don't meet the above conditions, you will need to consider your wider connections to the UK against a set of criteria.

http://www.blplaw.com/media/how-can-we-help-you/pr... gives an illustration - I am not connected to BLP, this is just the first publicly-available flowchart I found on the 'net.

As said above by Olf, your wife is likely to remain UK tax resident, so will be taxable on any income. If you're a UK or EU (and a few other countries) citizen, then you will still be able to claim the income tax Personal Allowance (£10,500 next year) so can still earn some UK income tax-free.

Edited by schmunk on Tuesday 19th August 08:42

LC23

1,285 posts

225 months

Tuesday 19th August 2014
quotequote all
OP - you show your occupation as airline pilot in your profile. If this is the case then you may not be eligible to qualify as non resident under the full time working abroad test. One of the problems trying to obtain advice from internet forums is that the full picture is not known and most people providing advice aren't qualified to do so.

Guidance is in the link. I would suggest you take some time to read this in its entirety. It is heavy going. "Relevant job" is covered from page 41 onward. And as already suggested, if in any doubt seek professional advice from someone who knows what they are talking about and has 100% of the relevant facts around your particular circumstances.

http://www.hmrc.gov.uk/international/rdr3.pdf

As an aside there is talk that the personal allowance will be removed for non tax residents in the near future.

jinkster

Original Poster:

2,242 posts

156 months

Monday 25th August 2014
quotequote all
Thank you for all replies. I have been told about this article in the Telegraph.

http://www.telegraph.co.uk/finance/personalfinance...

Does this shed any light on my position?

LC23

1,285 posts

225 months

Monday 25th August 2014
quotequote all
That's from 2005? SRT came into force from April 2013. Seriously read the guidance I linked in my post and if you are still unsure obtain professional advice. This isn't straight forward.

Sideways Rich

1,110 posts

177 months

Monday 25th August 2014
quotequote all
schmunk said:
Assuming you're talking about income tax, it will depend on what you're doing in Qatar.

If you're working outside the UK full time (35+ hours per week), and it will be for a period covering at least a complete UK tax year (6 April to 5 April), then all you need to do is limit your UK presence to no more than 90 days per tax year (counted by presence in the UK at midnight at the end of the day) and UK workdays to no more than 30 days (where 3 hours spent working in the UK in a day counts as a workday). Having a house / wife / family / bank accounts / etc. in the UK has no impact. NB with this test you can split the tax year into resident and non-resident parts - the day counts are pro-rated to the non-resident part.

If you don't meet the above conditions, you will need to consider your wider connections to the UK against a set of criteria.

http://www.blplaw.com/media/how-can-we-help-you/pr... gives an illustration - I am not connected to BLP, this is just the first publicly-available flowchart I found on the 'net.

As said above by Olf, your wife is likely to remain UK tax resident, so will be taxable on any income. If you're a UK or EU (and a few other countries) citizen, then you will still be able to claim the income tax Personal Allowance (£10,500 next year) so can still earn some UK income tax-free.

Edited by schmunk on Tuesday 19th August 08:42
The 10,500 personal allowance, can one use this against rental profits from ones house if they are out of the uk for a full tax year? Or is rental profit not allowed to be set against "income" allowance

Eric Mc

121,941 posts

265 months

Monday 25th August 2014
quotequote all
Are you referring to the annual tax fee allowance - which is currently £10,000 (although it will probably go up next year as it usually increases each year)?

This allowance is available against any income received by a person liable to UK tax on their income.

It is offsetable against any class of income that is subject to UK Income Tax, whether it is salary, interest income, dividend income or rental income.

In other words, it goes against the individual;'s total income that will be subject to UK Income Tax.

LC23

1,285 posts

225 months

Monday 25th August 2014
quotequote all
Bear in mind as I mentioned above. There is talk the personal allowance may be removed for non residents.

Eric Mc

121,941 posts

265 months

Monday 25th August 2014
quotequote all
There are always possible future changes to tax rules which may or may not happen. There always has to be a proviso in any sort of tax advice given that future regulations may be different.