Tax & Living away
Discussion
Ladies and Gents,
Hopefully some of you may be able to help, a tax question..
I have heard of people living in Monaco / Surrounding area, and working in London Tue/Wed/Thur, (only a full day Wednesday due to the travel)
Take the heli taxi to Nice Airport from Monaco, take the Easyjet 10:40 on a Tuesday, arrive at their office by lunch, conduct business until leaving on Thursday mid afternoon to return to Nice on the 17:45 Easyjet.
With the above scenario there is only a full day spent within the U.K. (Wednesday)
I can see it being possible perhaps from a business point of view in the advent of the current business technology available (Laptops, 4G, Blackberry etc etc)
What are the tax implications? What are the Pro's and Con's?
I realise there will be the travlelling aspect, and cost associated with flights, but do people think all this could be offset by any possible tax oppertunites on earnings?
Regards
Adam
Hopefully some of you may be able to help, a tax question..
I have heard of people living in Monaco / Surrounding area, and working in London Tue/Wed/Thur, (only a full day Wednesday due to the travel)
Take the heli taxi to Nice Airport from Monaco, take the Easyjet 10:40 on a Tuesday, arrive at their office by lunch, conduct business until leaving on Thursday mid afternoon to return to Nice on the 17:45 Easyjet.
With the above scenario there is only a full day spent within the U.K. (Wednesday)
I can see it being possible perhaps from a business point of view in the advent of the current business technology available (Laptops, 4G, Blackberry etc etc)
What are the tax implications? What are the Pro's and Con's?
I realise there will be the travlelling aspect, and cost associated with flights, but do people think all this could be offset by any possible tax oppertunites on earnings?
Regards
Adam
Residency is one of the most complex areas of UK tax. At its simplest, it is based on number of days spent in the UK. However, other factors - such as property ownership in the UK, habitual return vists etc make the actual law very complicated. Merely basing yourself abroad over the week-end, on its own, will not be sufficient to lose UK tax residency status.
A couple of thoughts on this (I have been non-res. on and off for a few years):
In abbreviated form, to be non-UK resident for tax you are allowed up to an average of 90 days per year in the UK. You can go up to 180 days in any one year, but over the longer term (typicaly a rolling four year period) you have to average 90 days or less.
A further complication is that the Chancellor recently announced plans to change the rules so that days travelling to/from the UK are to be counted as 'time in'.
What you are proposing is unlikely to count as enough time out - however, if you do go further down this route make sure to get an expat tax accountant to advise; as has been stated, the rules are complex.
In abbreviated form, to be non-UK resident for tax you are allowed up to an average of 90 days per year in the UK. You can go up to 180 days in any one year, but over the longer term (typicaly a rolling four year period) you have to average 90 days or less.
A further complication is that the Chancellor recently announced plans to change the rules so that days travelling to/from the UK are to be counted as 'time in'.
What you are proposing is unlikely to count as enough time out - however, if you do go further down this route make sure to get an expat tax accountant to advise; as has been stated, the rules are complex.
Eric Mc said:
Residency is one of the most complex areas of UK tax. At its simplest, it is based on number of days spent in the UK. However, other factors - such as property ownership in the UK, habitual return vists etc make the actual law very complicated. Merely basing yourself abroad over the week-end, on its own, will not be sufficient to lose UK tax residency status.
As Eric has stated, simply being out of the UK for 275 days or more is not usually enough to satisfy the criteria stimpulated in IR20. A good starting point is to inform the Revenue of your intention to 'leave the country permanently' via a form P86. Recently the 90 day average rule was contested by HMRC (Gaines-Cooper) and the defendant lost, therefore assuming you can be in the country for 180 days but still satisfy the 90 average over 4 years is not as clear cut as it sounds.There are other things to consider, the UK property ownership being a recent sticking point...lots to think about.
Eric Mc said:
There are other things to consider, the UK property ownership being a recent sticking point...lots to think about.
Sorry to jump into this thread so late, but I couldn't find anything on the HMRC pages about owning a house being either a positive or negative thing. Any chance of a brief explanation?The HMRC websiite is very inadequate when it comes to the more complex areas of UK tax - of which "Residence" and "Residency Status" is one particularly complex area.
There are some basic rules - which have already been mentioned above. But there is also a whole host of not so clear cut rules underlying residency determination of which property ownership is one.
If an individual emigrates and claims that it is a permanent emigration, if he/she retains his/her old home in the UK, the Revenue may claim that he/she has not completely abandoned his/her UK tax residency status.
Obviously, they would take this into account having already reviewed the visiting periods allowed and all the other factors they normaly look at.
There are some basic rules - which have already been mentioned above. But there is also a whole host of not so clear cut rules underlying residency determination of which property ownership is one.
If an individual emigrates and claims that it is a permanent emigration, if he/she retains his/her old home in the UK, the Revenue may claim that he/she has not completely abandoned his/her UK tax residency status.
Obviously, they would take this into account having already reviewed the visiting periods allowed and all the other factors they normaly look at.
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