billskip
Well-known member
If the boat you live aboard is British regestered, does that not put you "on British soil"
Avoiding (NOT evading) UK tax as a liveaboard
- Thread starter fliti
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maby
Well-known member
Possibly so. Our advisor was strongly suggesting that we should purchase property in a country with an acceptable tax regime such as the Isle of Man. He said that claiming to live on a boat doesn't carry much weight with the tax man.
Tranona
Well-known member
No. A boat is not property but a chattel. "On British soil" has no meaning for individuals. There are different types of residence and nationality which are determined by your individual circumstances - and you can be deemed a resident even if you don't live in the country, for example for tax purposes.
Matelot Joe
New member
Health
It is very relevant, the first thing a nurse will ask you is, have you been resident in the country, if not, you will not be entitled to national health treatment.
Lots of people have been caught out by this one.
keep a postal address here, even if its a mate or family.
It is very relevant, the first thing a nurse will ask you is, have you been resident in the country, if not, you will not be entitled to national health treatment.
Lots of people have been caught out by this one.
keep a postal address here, even if its a mate or family.
maby
Well-known member
Not if you want to dodge the tax man!
binch
New member
NR and NordR
When we first started living aboard and had our investments in gilts, (then yielding 15%) we became classed as non-res. It took a lot of correspondence (Oh but where is your villa>) etc.
Having got a declaration that living in a Brit Reg boat is not of itself evidence of anything, the tax men gave way on the grounds that I had no other residence. I got saletter from Margaret Thatcher (always go to the top) which helped, I think.
This held good for 10 years of cruising until we returned to England to exchange boats. Then the whole rigmarole again. Be persistent. You'll grind the b******s down. In the end, investment values changed and we told them we had returned to England, paid our arrears of national insurance (now that was THE BEST investment I ever made) and we kept UK residence ever since.
Now that tax rates have fallen so much (I was paying 18/3 in the pound when I started) the advantages of messing about have been reduced.
But we still have no house. No taxes other than income tax, and we do not have to pay VAT on any expenditure on the boat because it is our residence.
When we first started living aboard and had our investments in gilts, (then yielding 15%) we became classed as non-res. It took a lot of correspondence (Oh but where is your villa>) etc.
Having got a declaration that living in a Brit Reg boat is not of itself evidence of anything, the tax men gave way on the grounds that I had no other residence. I got saletter from Margaret Thatcher (always go to the top) which helped, I think.
This held good for 10 years of cruising until we returned to England to exchange boats. Then the whole rigmarole again. Be persistent. You'll grind the b******s down. In the end, investment values changed and we told them we had returned to England, paid our arrears of national insurance (now that was THE BEST investment I ever made) and we kept UK residence ever since.
Now that tax rates have fallen so much (I was paying 18/3 in the pound when I started) the advantages of messing about have been reduced.
But we still have no house. No taxes other than income tax, and we do not have to pay VAT on any expenditure on the boat because it is our residence.
maby
Well-known member
Really??? How about the VAT on the boat itself?
Conachair
Guest
Well a sample size of one doesn't mean much but I just left, went into a tax office beforehand and they said basically if I met the crtiterea then they weren't much interested what i got up to outside the country, only in uk based income.. Was nonres anywhere for 5 years then just turned up in UK again and didn't tell anyone until declaring some income on the next online self assessment. Maybe a bit naughty but no one has said anything.
They were quite approachable and helpful in the tax office beforehand, worth a chat if anyone is thinking about it.
KellysEye
Active member
>Our advisor was strongly suggesting that we should purchase property in a country with an acceptable tax regime such as the Isle of Man. He said that claiming to live on a boat doesn't carry much weight with the tax man.
Your advisor is wrong. As I said after four tax years away and no fixed address you can apply for not resident and not ordinarily resident. You will get a tax rebate on your last four years income. Also you don't need to sell all your assets and you can have a holding address. We kept a house and flat that we rented out. But as I also pointed out you need to sell property before you get back to avoid capital gains tax.
The tax folks seem to be reasonably happy with not res and not ordinarily res. The people they are trying to nail are the not domiciled who tend to hide very large sums of money and assets often in the BVIs.
Your advisor is wrong. As I said after four tax years away and no fixed address you can apply for not resident and not ordinarily resident. You will get a tax rebate on your last four years income. Also you don't need to sell all your assets and you can have a holding address. We kept a house and flat that we rented out. But as I also pointed out you need to sell property before you get back to avoid capital gains tax.
The tax folks seem to be reasonably happy with not res and not ordinarily res. The people they are trying to nail are the not domiciled who tend to hide very large sums of money and assets often in the BVIs.
maby
Well-known member
It is possible that we are targeting different savings - we were seeking to avoid inheritance tax and the advice is that we need to get all our assets out of the UK...
Conachair
Guest
KellysEye
Active member
>If you are leaving the UK permanently or indefinitely you will become not resident and not ordinarily resident from the day after the day of your departure.
I don't think I'm mistaken because that is true and I made that clear when I said we got an income tax rebate backdated four years, which was how long it took to get not resident staus. If it it wasn't clear then I'm sorry.
I don't think I'm mistaken because that is true and I made that clear when I said we got an income tax rebate backdated four years, which was how long it took to get not resident staus. If it it wasn't clear then I'm sorry.
binch
New member
I did not do this with our present live-aboard boat as I have had no reason.
But with the previous two, I negotiated exemption for boats over 15 GRT on the part one register..
I think the DBA (Barge Association) have recently fought and won a case in the high court. No use asking the RYA, the DBA are not affiliated. But some lawyer should be able to trace the case.
Conachair
Guest
I stopped paying tax on non uk earnings the day I left, no need to claim back anything.
rallyveteran
New member
me too
temptress
Well-known member
I would suggest to talk to a different adviser. Get a second opinion. You circumstances may be such that the original adviser is correct and is the only option for you but there may be other ways.
Certainly you don't have to be resident anywhere although this can cause you problems getting things done or even having bank account in the first place.
There is no clear cut way and the rules are deliberately grey as to leave room for interpretation. Speak to the TAX man - I've often found them very helpful but again not definitive.
Avoiding inheritance tax can be tricky as it also depends on the status of those who inherit not just your status. So their circumstances need to be taken into account as well..............
rallyveteran
New member
To avoid Inheritance Tax, as maby is contemplating, you need to shed your UK domicile, not merely residence. This is a lot harder, and I suspect maby's adviser is correct that it could not be achieved with any certainty without buying a property abroad and severing virtually all links with the UK.
maby
Well-known member
Exactly. As I understand it, we'll need to sell everything in this country and take it all to the Isle of Man - apparently the Channel Islands will not cut it!
We can then have up to 90 days in the UK each year.
rallyveteran
New member
Ok. Your problem on this thread was that every single other contributor was talking about changing residence, not domicile, and that caused some confusion. But thanks for joining in.
mocruising
Member
It is my understanding that you can be resident nowhere but you can not be domiciled nowhere. (Sorry about the English) If you shed your UK domicile (And I would think very hard before doing this) you must be domiciled some where else. There are much easier ways to legally avoid IHT. I always thought the IOM was in (Part of) the UK.
I think there are some with confused views on this thread, maybe me included. I dis- connected myself from the UK income tax system in 1980. I do however pay tax on the rental income from property in the UK. I do and always have maintained links with the UK (Family, houses, kid's were at boarding school, fully paid up with my class 3 NI) and I will always remain domiciled there, as one day soon I will sell all my rental property and then take up residence again and sail the south coast.
I think there are some with confused views on this thread, maybe me included. I dis- connected myself from the UK income tax system in 1980. I do however pay tax on the rental income from property in the UK. I do and always have maintained links with the UK (Family, houses, kid's were at boarding school, fully paid up with my class 3 NI) and I will always remain domiciled there, as one day soon I will sell all my rental property and then take up residence again and sail the south coast.