Implications of declaring yourself non resident in UK

CJtill


Joined: 02/05/2008
Posts: 836

Message Posted:
01/07/2011 14:57

Moved over to Catalkoy several years ago and am now due to draw a pension so looking at tax implications. Has anyone any experience of being non resident in England. I am wondering about things like taking out ISAs, premium bonds, holding bank accounts. Can you still do these things if you are non resident?



Corinne

Chegwin


Joined: 24/03/2009
Posts: 775

Message Posted:
01/07/2011 15:57

C&M

Didn’t think you were that old.

Yep.

And you get it all tax free.

Email me off board if you want to know more.

Pugwash


Joined: 06/09/2010
Posts: 1797

Message Posted:
01/07/2011 16:02

The best thing you will ever do is declare yourself non-resident, unless you have substantial property and financial holdings in the UK.

Stubs


Joined: 01/07/2008
Posts: 641

Message Posted:
01/07/2011 16:37

For tax reasons yes, however if you need healthcare then as a non resident you will have to pay

Pugwash


Joined: 06/09/2010
Posts: 1797

Message Posted:
01/07/2011 16:39

Nothing to do with being a Non resident for Tax purposes stubs it is judged differently

Chegwin


Joined: 24/03/2009
Posts: 775

Message Posted:
01/07/2011 17:04

Any earnings derived from whatever source in the UK, if you are nonresident, and have residency in a non EU country are tax free.

As long as the correct forms are submitted, to the correct authorities, and you obviously do not exceed the allowed days in the UK or member states of the EU, (bit of a grey area), then all earning or drawers in the UK are free from UK income tax.

Earnings derived from whatever source, whilst you are nonresident in the UK, can be repatriated with no tax implications.

There is a note on most forms, enlightening you to the fact that any overseas incomes may be required to be qualified, or words to that effect.

Agobard


Joined: 20/08/2008
Posts: 271

Message Posted:
01/07/2011 17:04

Go to the HMRC website and download HMRC6 which gives full details of residency/non-residency and all that it entails. Be aware, however, that any pension income that arises in the UK will still be taxed there because the TRNC - being unrecognised - does not have a double taxation agreement with the UK. The only way you can get your UK pensions without tax deduction is if you can establish residency in the RoC - possible but not easy if you are living in the north. Whether this would be worth the time and hassle involved would largely depend on how much tax you are paying in the UK.

On the subject of UK bank accounts, you cannot open new accounts once you have taken up permanent residence abroad due to money laundering regulations although you can open offshore accounts - Channel Islands, Isle of Man. Offshore accounts are frequently too expensive to consider unless you have a serious amount of money

Chegwin


Joined: 24/03/2009
Posts: 775

Message Posted:
01/07/2011 17:30

This may be helpful and the site may provide further information.



http://www.hmrc.gov.uk/cnr/withholding-tax.pdf

Stubs


Joined: 01/07/2008
Posts: 641

Message Posted:
01/07/2011 17:44

Pugwash



As a non-resident you are not entitled to free healthcare unless you pay seperate contributions. From memory it cost us around about £250 per annum in a payment.



For taxation as long as you are not domociled in the UK income is treated differently ie you can not spend anymore than 90 days in the UK in any one tax year.



It is best to speak to a good accountant.

Pugwash


Joined: 06/09/2010
Posts: 1797

Message Posted:
01/07/2011 17:51

Stubs correct if you remain non resident, however if you return to live in the UK as is your right then you are entitled to full healthcare whatever your NHS contributions may or may not have been. Also many Doctors/NHS areas waive this for people who have gone abroad to live in retirement then fall ill, there are many posts on this.

Stubs


Joined: 01/07/2008
Posts: 641

Message Posted:
01/07/2011 18:12

Pugwash



If you return to live in the UK then you no longer have the taxation status of non-domociled. When changing residential status to a UK resident of course you are entitled to healthcare benefits.



There are some doctors and NHS areas who have but there are also many whom will not due to government pressure to cut costs.



http://www.adviceguide.org.uk/index/your_family/health/nhs_charges_for_people_from_abroad.htm



http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/documents/digitalasset/dh_127878.pdf



The last one is implemented in August 01 2011

Pugwash


Joined: 06/09/2010
Posts: 1797

Message Posted:
01/07/2011 18:21

You can be a non resident for "Tax purposes" but still remain domiciled in the UK.

keithr


Joined: 20/08/2008
Posts: 720

Message Posted:
01/07/2011 19:08

You could consider a QROPS arrangement for your pension before you kick it off,but you must do the maths here,they will charge you an annual fee for doing it,if this is more than your UK tax rate,then forget it.

Bradus


Joined: 25/02/2007
Posts: 2641

Message Posted:
01/07/2011 19:14

PUSWASH,



this topic has been discussed on Cyp44 recently.Useful information is contained on the thread "Expat told to pay NHS bill"



It would appear that it is no longer based on taxes and contributions but a continual residency of at least 6 months in the UK.

CJtill


Joined: 02/05/2008
Posts: 836

Message Posted:
01/07/2011 19:21

Thanks everyone. I am looking at QROPs and know the fees are quite hefty but weighing up whether it is worth being non resident is the issue at the moment. I wouldn't want to have to give up bank accounts etc but just need to know all the implications before making decisions. I think healthcare is something I would deal with over here hopefully as they are improving tremendously on their facilities albeit you have to pay.

mozgor



Joined: 16/06/2010
Posts: 256

Message Posted:
01/07/2011 22:16

Sorry folks it's illegal to open ISAs in the UK if you are a non resident, however, if you have an existing one you can keep it, but you are likely to get taxed if you take the funds out of the country. Most banks will also not allow you to open 'normal' accounts and only offer specific non resident accounts. It's a minefield!!!!

BrightonJim


Joined: 27/07/2010
Posts: 145

Message Posted:
02/07/2011 07:46

Pugwash, you mention "non-domiciled". This is an entirely separate status to "non-resident" and should not be confused, as tax status of "non-doms" is different to that of "non-residents". HMR&C will take some convincing before they accept that your domicile has changed whereas non-residency is largely a matter of fact.

Visitor


Joined: 19/08/2010
Posts: 492

Message Posted:
02/07/2011 08:09

Brightonjim and Mozgar are correct. Also you cannot keep an ISA as you need to be UK resident. Bank savings accounts also are more difficult to get at good rates. rates offered to non residents is usually much lower.

Visitor


Joined: 19/08/2010
Posts: 492

Message Posted:
02/07/2011 08:14

Also if you are receiving any UK benefits but spending time outside the UK i.e. 3 weeks allowed for pension credit you could be charged with an offence. There was a case of a UK man who moved to Sri lanka continued to claim as a UK resident and is now serving 3 years in prison for fraud.

itfc1978


Joined: 31/03/2009
Posts: 187

Message Posted:
02/07/2011 08:42

Visitor



Can I just clarify the ISA rules.



When an individual invests in an ISA they utilise an annual allowance which they qualify for at that time.



Why would becoming non-resident effect a transaction done in the past?



Cheers

Ridle


Joined: 01/01/2009
Posts: 144

Message Posted:
02/07/2011 09:03

Message 6.

Chegwin, I thought even if you fulfilled all criteria as a non u.k. resident income received from rents on property & bank interest is taxed before it leaves the u.k.



i.e. if you have a letting agent they are bound by law to deduct tax on rental income & pay to the revenue.

Harold2555



Joined: 19/04/2008
Posts: 1139

Message Posted:
02/07/2011 09:20

There is some completely wrong advice in this thread and some confusion between different things. Residency and Tax are complicated areas but the best advice on here is consult a good accountant.



Fortunately I am one (well an accountant at least, don't know about good!) So a very quick taxation comment.



Income Tax is applied based on residency AND source of income. If you are resident (a complicated concept which also includes Ordinaarily resident) you pay income tax in UK on all income worldwide generated (subject to relief if you would be taxed twice). If you are not resident then you still pay income Tax on income derived from the UK subject to special provisions in any Double Tax treaty with your country of Residence. There are special rules regarding personal allowances.



Capital Gains and Inheritance Tax have different rules.



SEE AN ACCOUNTANT!



Harold

cyprusairsoft



Joined: 22/06/2009
Posts: 2066

Message Posted:
02/07/2011 10:25

im paying uk tax on my pension (company)



had a nice little rebate last week thanks inland revenue



no home in uk

you will still have to pay your dues to uk

itfc1978


Joined: 31/03/2009
Posts: 187

Message Posted:
02/07/2011 12:59

Will those promoting QROPs explain to me why this is a better option then a SIPP



I am aware that a QROP will pay 30% against 25%TFC and income adopts the tax regime of the country of payment,but given that by careful manipulation of the TFC from a SIPP income will be tax free leaving an individual to make use of increased personal allowances later in life for the taxable portion plus the charges are a lot less, there is no possibility of upsetting the UK IR, there are a far greater range of UK onshore funds to choose from and you will still be able to utilise ISAs which if selected carefully can be an excellent source of additional tax free income.



This sounds like a G60 question!!



I am an a retired IFA of some years ago, so old knowledge along with a fading memory probably means I am missing something bleeding obvious!

Chegwin


Joined: 24/03/2009
Posts: 775

Message Posted:
02/07/2011 13:02

msg 21.

Correct. Landlords are obliged by law to deduct tax...............unless you get a form from the tax man allowing them to pay rents gross. Don’t have the reference form with me just now but that’s how I have been doing it for years.

And the same with the bank. Interest paid gross with the right form.

Ridle


Joined: 01/01/2009
Posts: 144

Message Posted:
02/07/2011 13:40

Thank you Chegwin.



I will be interested to know more about the forms. I would be pleased if you could let me have details.



My e mail is denis_ridley@yahoo.com

ozankoys


Joined: 20/06/2008
Posts: 905

Message Posted:
02/07/2011 14:10

Do you still qualify for a tax free personal allowance if you are non-resident?

Chegwin


Joined: 24/03/2009
Posts: 775

Message Posted:
02/07/2011 14:41

Denis

Gis a day or two and I will get the form references for you.

Don’t have them with me just now.

Chegwin


Joined: 24/03/2009
Posts: 775

Message Posted:
02/07/2011 14:49

Denis

I just did a quick Google and I think it was the form in the link.



http://www.hmrc.gov.uk/cnr/nrl1.pdf



I will check anyway when I get back and confirm.

There is plenty of other good info' there aswell.

Ridle


Joined: 01/01/2009
Posts: 144

Message Posted:
02/07/2011 17:08

Thank you Chegwin.



This could be what I am looking for.

Visitor


Joined: 19/08/2010
Posts: 492

Message Posted:
03/07/2011 10:38

itfc1978 the reason you cannot keep your ISA is because they offer tax advantages and are therefore only

for UK residents.



Check any ISA for the rules

itfc1978


Joined: 31/03/2009
Posts: 187

Message Posted:
03/07/2011 10:52

Re message 31.



This is an extract from the revenue rules



Moving abroad

You can only put money into an ISA if you are resident and ordinarily resident in the UK for tax purposes.

If you move abroad you cannot continue putting money into the ISA. However, you can keep existing ISAs and you will still get tax relief on investments held in them. When you return, you can start putting money in again (subject to the normal annual limits).

There is one exception. Crown employees serving overseas (typically members of the armed forces and diplomats), or people married to or in a civil partnership with a Crown employee serving overseas, can open and subscribe to an ISA in the usual way.

Further information

If you have any questions about the tax rules for ISAs:



visit our website at: http://www.hmrc.gov.uk/isa



call our ISA Helpline on Tel 0845 604 1701 (8.30 am to 5.00 pm, Monday to Friday).



and whilst stumbling around revenue sites I find your answer re message 27 Y

itfc1978


Joined: 31/03/2009
Posts: 187

Message Posted:
03/07/2011 10:53

yes you can keep your PA`s

stellasstar1



Joined: 02/07/2008
Posts: 1519

Message Posted:
03/07/2011 16:03

If you are flying in and out of Larnaca to England, how do the English Government know the amount of days you are either in or out of the country.?

stellasstar1



Joined: 02/07/2008
Posts: 1519

Message Posted:
04/07/2011 18:49

Does anyone know the answer to this?

wanderer


Joined: 05/02/2009
Posts: 1653

Message Posted:
04/07/2011 19:08

Stella

when you enter the UK the passport is scanned and one assumes that a log of all entries into the uk is kept

TRNC keep two records at least of entries and exits from the TRNC one for Ercan entries/exits and one for the south entries/exits (ins and outs sheets)

A former player of wolves Don Goodman had been playing abroad and had to leave the UK at a moments notice i.e the first flight out and 10 days in a travel lodge in Belgium to avoid a large tax bill

hope it helps

Graeme


Joined: 05/11/2008
Posts: 18

Message Posted:
04/07/2011 19:08

Stellasstar1



Under Self assessment it is up to you, when you complete your tax return, to declare the number of days you are in the UK.



As with all other items declared on your return you can tell the truth or lie - the latter is an offence.

Visitor


Joined: 19/08/2010
Posts: 492

Message Posted:
04/07/2011 19:13

Stella. I think the borders agency keep records when they scan your passport on entry. If they wanted to

pursue I guess they could check bank statements etc

Visitor


Joined: 19/08/2010
Posts: 492

Message Posted:
04/07/2011 19:21

An interesting story of being caught out



http://www.thetelegraphandargus.co.uk/news/local/localbrad/8166819._Life_of_Riley__benefits_cheat_ordered_to_repay___30_000/

newscoop


Joined: 23/12/2007
Posts: 2197

Message Posted:
05/07/2011 05:10

Then there's the Nigerian woman who on hearing she was expecting a multiple birth hopped on a flight to the UK where she had quins at Homerton hospital.



£200 grand later she's now applying to extend her visa as she has no means of support in Lagos.



The NHS has admitted she likely won't be able to pay anything back so they'll have to write off her charges.



Seems fair eh?

philbailey


Joined: 17/01/2011
Posts: 3534

Message Posted:
05/07/2011 05:13

Msg 40. plus she took fertility drugs



double the dosage she should take

stellasstar1



Joined: 02/07/2008
Posts: 1519

Message Posted:
06/07/2011 12:09

My question is hyperthetical(is spelling right?). When you go into England from Larnaca, I don't remember them scanning my passport, they just look at it and wave you through. I know going across to the South and back you have your "ins and outs and they log onto the computer to see your details, and keep a record, but that's not what I mean. I just wondered how in England they knew how many days you were in the country.

TRNCVaughan


Joined: 27/04/2008
Posts: 4578

Message Posted:
06/07/2011 12:28

Don't the new passports have a chip and antenna in the back page? Maybe when the passport is inspected it is automatically scanned and logged.

Chegwin


Joined: 24/03/2009
Posts: 775

Message Posted:
06/07/2011 12:37

When the taxman cometh and asks for money it is up to you to prove that you don’t owe him.

Otherwise he will take what is due anyway he can.

That is how it works in the UK.

wanderer


Joined: 05/02/2009
Posts: 1653

Message Posted:
06/07/2011 12:42

stella they are scanned @ Stanstead you can do the job yourself with the face recognition que or let the boarder agency people d o it when you get to the window

Tango1


Joined: 19/02/2011
Posts: 1151

Message Posted:
06/07/2011 13:24

Yes, the new chip passports are much, much quicker than going through Passport Control, however your "ins and outs" will now be recorded, just as they are at Passport Controls here in the TRNC. A lot of incorrect information on this Board regarding healthcare and retirees. Matters are changing virtually all the time and Dr's don't have the discretion they used to have with regard to referring a patient to a Specialist. As someone said earlier it is a minefield and totally biased toward new immigrants and against retirees.