Simple tax question
Discussion
anonymous said:
[redacted]
I’ll take shortfall to mean assets than have been taxed at under standard government rates? anonymous said:
[redacted]
I’m not doing anything dodgy, just wondering if perhaps becoming a permanent resident of a country like Saudi Arabia with virtually 0% income tax would be possible and work out of the UK claiming all your assets go into accounts in Saudi Arabia. If funds are exchanged in international waters (or similar situation where no single country has jurisdiction) for goods or services in the UK would it be illegal to keep that money off shore and avoid paying income tax?
My understanding is that all income earned regardless of where it is in the world is liable by the UK taxman.
However, if the income is earned in a foreign country, then you will be liable for local tax laws (usually). You will also be liable for the full amount by the UK tax authorities. However, the UK Tax b'stards will discount whatever payment you've made to the country where the income was earned against the tax you owe them. But that only applies where double taxation treaties exist.
IIRC the offshore aspect is now illegal. You have earned the money therefore you pay the tax. However, the offshore bit kinda stop Inland Revenue checking up on you too closely. But you are still fiddling the tax though.
I'm thinking that the only solution is to build up a huge cash pile in that other country over a number of years in a company. Then when its big enough spend two years outside the UK and get that company to offload its cash pile onto you. Pay the local taxes and return a rich man.
However, the problem there is that you still have to declare the income you earned abroad, and if you emigrate a pauper and come back a multimillionaire Inland Revenue may take a closer look.
I think the only solution is to leave the UK and never come back
>> Edited by tinman0 on Thursday 30th June 13:14
However, if the income is earned in a foreign country, then you will be liable for local tax laws (usually). You will also be liable for the full amount by the UK tax authorities. However, the UK Tax b'stards will discount whatever payment you've made to the country where the income was earned against the tax you owe them. But that only applies where double taxation treaties exist.
IIRC the offshore aspect is now illegal. You have earned the money therefore you pay the tax. However, the offshore bit kinda stop Inland Revenue checking up on you too closely. But you are still fiddling the tax though.
I'm thinking that the only solution is to build up a huge cash pile in that other country over a number of years in a company. Then when its big enough spend two years outside the UK and get that company to offload its cash pile onto you. Pay the local taxes and return a rich man.
However, the problem there is that you still have to declare the income you earned abroad, and if you emigrate a pauper and come back a multimillionaire Inland Revenue may take a closer look.
I think the only solution is to leave the UK and never come back
>> Edited by tinman0 on Thursday 30th June 13:14
speedy_thrills said:
I’m not doing anything dodgy, just wondering if perhaps becoming a permanent resident of a country like Saudi Arabia with virtually 0% income tax would be possible and work out of the UK claiming all your assets go into accounts in Saudi Arabia.
But that's a contradiction isn't it. Becoming a permanent resident of another country & yet working out of the UK ? If you live in the UK, if you perform your service in the UK, if you carry out your business in the UK, you will be caught by Gordon.
Residency is a matter of fact, not choice. Where you are resident for tax purposes is determined by the number of days in each year you spend in that country.
If you are a UK resident, then you are indeed taxed on all your income irrespective of the country in which it was generated. You may suffer tax deducted at source by the tax authorities in the foreign country. However, if that country has a Double Taxation Agreement with the UK, it is likely that you will not suffer a double lot of tax on the same piece of income.
If you are a UK resident, then you are indeed taxed on all your income irrespective of the country in which it was generated. You may suffer tax deducted at source by the tax authorities in the foreign country. However, if that country has a Double Taxation Agreement with the UK, it is likely that you will not suffer a double lot of tax on the same piece of income.
55jnj said:
What ????????
…Lets put this in GCSE terms…Sandy makes $10 in income fencing stolen mobile phones in her school, she has to pay income tax at the rate of 10%
Can Sandy claim that her income is only $9 due to tax and hence only pay 90 cents of tax leaving her with $9.10?
Edit: Vast oversimplification obviously because of the exponential growth in her tax rate.
>> Edited by speedy_thrills on Saturday 2nd July 16:10
speedy_thrills said:
What ????????
…Lets put this in GCSE terms…Sandy makes $10 in income fencing stolen mobile phones in her school, she has to pay income tax at the rate of 10%
Can Sandy claim that her income is only $9 due to tax and hence only pay 90 cents of tax leaving her with $9.10?
Edit: Vast oversimplification obviously because of the exponential growth in her tax rate.
>> Edited by speedy_thrills on Saturday 2nd July 16:10
Right. Why doesn't she then claim her income is $8.20 (the $9.10 less the 90 cents) & then only pay 82 cents ? In fact why doesn't she then claim her income is $7.38 ($8.20 less 82 cents) & only pay 74 cents. In fact if she hangs around long enough doing this fencing the phones, she'll end up paying no tax - perfect !
Of course this is all rather silly but then you're having a laugh ........ aren't you ?
speedy_thrills said:
What ????????
…Lets put this in GCSE terms…Sandy makes $10 in income fencing stolen mobile phones in her school, she has to pay income tax at the rate of 10%
Can Sandy claim that her income is only $9 due to tax and hence only pay 90 cents of tax leaving her with $9.10?
Edit: Vast oversimplification obviously because of the exponential growth in her tax rate.
>> Edited by speedy_thrills on Saturday 2nd July 16:10
No.
Your income is seen as what you recieved before tax regardless of the tax authority that you are covered by.
So, if Sandy was in the States, she would pay 10% on the $10 in tax. She would then have to declare all $10 to the UK tax man and be charged a further 40% on the whole $10.
This would in effect leave with $5. However, because a double taxation treaty between the UK and US exists, she can offset the $1 paid to the IRS against her UK tax bill. Therefore, she is left with $6, the same as what she would of earned in the UK.
I think.
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