Avoiding (NOT evading) UK tax as a liveaboard

[KellysEye]

>I stopped paying tax on non uk earnings the day I left, no need to claim back anything.

I'm a bit confused. I was talking about UK taxed income that was rebated. You are talking about something completely different, non UK earnings. We had none until we moved all our money offshore when we left and we got a tax rebate on the interest too after four years when we got not res. Did you have UK earnings before you left and, if so, what happened?

 

[Conachair]

>I stopped paying tax on non uk earnings the day I left, no need to claim back anything.

I'm a bit confused. I was talking about UK taxed income that was rebated. You are talking about something completely different, non UK earnings. We had none until we moved all our money offshore when we left and we got a tax rebate on the interest too after four years when we got not res. Did you have UK earnings before you left and, if so, what happened?

Not quite with you there, did you get taxed on non UK interest which you claimed back? How did they get it in the first place?
Whilst away I did a few bits and pieces in the UK, which I declared and paid some tax on. Anything earned outside the UK wasn't taxed. Even if it was for a UK based company. Don't think there's any (legal) way of not paying UK tax on earnings of any kind arising in the UK.

 

[jordanbasset]

Not quite with you there, did you get taxed on non UK interest which you claimed back? How did they get it in the first place?
Whilst away I did a few bits and pieces in the UK, which I declared and paid some tax on. Anything earned outside the UK wasn't taxed. Even if it was for a UK based company. Don't think there's any (legal) way of not paying UK tax on earnings of any kind arising in the UK.

If you are resident in Cyprus (Greek part) you don't pay U.K. tax on your pension from the U.K. Do get taxed 5% Cyprus tax on your pension. Not sure what other countries also allow this but would be surprised if Cyprus was the only one

 

[timchapman]

I have recently used an independant financial advisor. Family company who are sailors and have a particular interest in cruising sailors. PM me if you want details.

 

[KellysEye]

>Not quite with you there, did you get taxed on non UK interest which you claimed back? How did they get it in the first place?

We moved our money to Barclays Wealth in Jersey and there is a European Witholding tax on offshore savings, 10% at the time. We sent copies of our not res to them and got the tax rebated. If you were not res but in Europe you would have to pay the tax, now 35%.

 

[Sea Devil]

I worked and lived abroad for many years before turning to life aboard. I hope to preserve my non resident status for tax purposes for a few more years by limiting my UK stays to the standard 90 days per year.I was wondering whether others have experience of any problems with the UK tax authorities when claiming non-residence as a liveaboard? Any special recommendations?

I did exactly that for years. In fact there is a department at the IR that deals with UK citizens who are non resident sailing around in non UK waters with no fixed address. My accountant made tax returns each year for my UK income but not of course my non UK earnings.

Try calling the IR and getting through to the non resident department then ask about the department that deals with folks who are moving around in boats...

 

[temptress]

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.

Ok so we are talking DOMICILE. Very different and hard to change - you will actually need to go and live somewhere for a few years and establish yourselves there to change your domicile. Your 90 days calculation is irrelevant simply moving stuff offshore, cutting all your ties with the UK and not coming back will not necessarily change you DOMICILE.

In over 25 years of being an ex-pat I am still DOMICILED in the UK.

GOOD LUCK.

 

[maby]

Ok so we are talking DOMICILE. Very different and hard to change - you will actually need to go and live somewhere for a few years and establish yourselves there to change your domicile. Your 90 days calculation is irrelevant simply moving stuff offshore, cutting all your ties with the UK and not coming back will not necessarily change you DOMICILE.

In over 25 years of being an ex-pat I am still DOMICILED in the UK.

GOOD LUCK.

My understanding is that it is relatively easy provided you really are prepared to cut all ties with this country. If I've taken everything I own outside the EU and have purchased a property somewhere else, then the UK government effectively ceases to know I exist - provided my chosen new home accepts me. When I die, my estate is settled under the laws of my new country - obviously it is up to my son to work out how honest to be with the UK tax man, but at least I have given him the opportunity to be economical with the truth!

 

[jimbaerselman]

My understanding is that it is relatively easy provided you really are prepared to cut all ties with this country. If I've taken everything I own outside the EU and have purchased a property somewhere else, then the UK government effectively ceases to know I exist - provided my chosen new home accepts me.

To see the rules as proposed, download the "consultation document" from this page.
OK, it's long, but it's clear, and straight from the Treasury's pen.

 

[maby]

To see the rules as proposed, download the "consultation document" from this page.
OK, it's long, but it's clear, and straight from the Treasury's pen.

OK - just about managed to stay awake till the end, and that would not be difficult to satisfy. We would intend to sell everything we own and move it outside the EU. We'll have no family under the definitions in that document here and no source of income here. Under the terms of these tests, I think we could probably spend up to 182 days here, but it may be necessary to cut this back for the first few years.

 

[temptress]

Just too difficult

My understanding is that it is relatively easy provided you really are prepared to cut all ties with this country. If I've taken everything I own outside the EU and have purchased a property somewhere else, then the UK government effectively ceases to know I exist - provided my chosen new home accepts me. When I die, my estate is settled under the laws of my new country - obviously it is up to my son to work out how honest to be with the UK tax man, but at least I have given him the opportunity to be economical with the truth!

OK - that may work for you but I say again Domicile is very hard to change. Cutting all ties and establishing yourself in another country may make you resident but not necessarily Domiciled there.

Some years ago I recalll having a very detailed conversatoin (over some very good malt) with a Law Professor at a top tier university about this very subject and we concluded it was difficult to define.

BUT if I understand correctly the exercise is to avoid your children paying tax on any estate when you die? Then the tax liability is theirs and not yours so it depends on their status.

 

[KellysEye]

>I say again Domicile is very hard to change

That's right and the interesting thing is not Domiciled own homes in the UK and spend all year here. After a number of years theyy have to pay a fixed tax on their overseas earnings. I've never understood how they get away with it given how diificult it can be to get not res and not ordinarily res if you are away sailing..

 

[maby]

OK - that may work for you but I say again Domicile is very hard to change. Cutting all ties and establishing yourself in another country may make you resident but not necessarily Domiciled there.

Some years ago I recalll having a very detailed conversatoin (over some very good malt) with a Law Professor at a top tier university about this very subject and we concluded it was difficult to define.

BUT if I understand correctly the exercise is to avoid your children paying tax on any estate when you die? Then the tax liability is theirs and not yours so it depends on their status.

Well, there's nothing wrong with tax evasion provided you don't get caught. If I die under UK jurisdiction, It's pretty much fait accompli. If I get everything outside this country, it gives my son a lot more opportunity to keep the government's thieving hands off my money - by whatever means he thinks appropriate....