full time cruisers and UK tax

[spindly_killer_fish]

So to address some points, I am eligible for full state pension as well as having a private pension. It seems the UK tax system is actually better than Thailand as I would get 25% tax free on my private pension plus the tax free allowance. As i dont intend withdrawing that much a year, its probably the best way forward. now i need to figure out how to keep a uk address that is digestible for all parties as i have no intention of keeping property here.

nice turn up for the books, i was discussing this with my mum this morning ho informs me my nephew is high up in HMRC, we arent a close family as you can see, but i will certainly be tapping him up for some knowledge.

I was looking at the HSBC bank, but alas the problem with maintaining anything revolves around an address which isnt east with no assets.

edit: for some reason i forgot to press the submit button :/

 

[bedouin]

Don't forget if you leave the UK your state pension will stop going up by the "triple lock" - that will mean it's value will decrease rapidly. If all your income in UK is state pension then it is not taxed at all at the moment - that is likely to change very soon but I will get banned for mentioning it.

Can you move your private pension abroad or will that continue to be paid in UK.

Sounds as if you may find it hard or not advisable to sever all ties with UK

 

[spindly_killer_fish]

Don't forget if you leave the UK your state pension will stop going up by the "triple lock" - that will mean it's value will decrease rapidly. If all your income in UK is state pension then it is not taxed at all at the moment - that is likely to change very soon but I will get banned for mentioning it.

Can you move your private pension abroad or will that continue to be paid in UK.

Sounds as if you may find it hard or not advisable to sever all ties with UK

im just trying to find the easiest way of not being shafted

I don't mind keeping a bank, but im struggling to find a way of doing that without an address. my initial thought was "if im not here, then why should i be taxed here"

 

[ashtead]

I would have thought with advancing years healthcare is a potential risk but maybe you have private healthcare in place. In discussions with those who live in US fairly permanently it would seem uk healthcare remains attractive. That said I have no detailed knowledge of Thai hospitals.

 

[spindly_killer_fish]

I would have thought with advancing years healthcare is a potential risk but maybe you have private healthcare in place. In discussions with those who live in US fairly permanently it would seem uk healthcare remains attractive. That said I have no detailed knowledge of Thai hospitals.

Something i would need to look into, but having had care in Thailand, i have found it far superior to the UK for what I needed, and we have private insurance for that.

 

[PlanB]

Can't you use a family or close friend address? That's what we did.

 

[spindly_killer_fish]

Can't you use a family or close friend address? That's what we did.

Alas i'm the youngest and our daughter will probably cruise with us after finishing her education.

 

[desmodromic]

UK Postbox can provide you with addresses (from Postbox to 'real' physical addresses this latter more costly of course). The system has served me very well for 15 years as everything is digital so post received as if in the UK. Probably other suppliers too - this lets me appear to be in the UK when it's necessary (banks insurance, investment firms, etc)

 

[Seven Spades]

Plus 1 If you are making such a fundamental move in your residence then you need to take professional advice. If you retain assets in the UK you cannot avoid UK tax but there are reciprocal arrangements with many other countries, so you can look at minimising your overall tax payments by either switching into tax free savings or moving assets into different tax regimes.

I think you are mixing up domicile and if you are a resident for tax purposes. It is very difficult to change domicile so moving abroad with substantial assets may not protect your heirs.

However if you are in the UK for fewer than 90 days you should not be resident for tax purposes as long as you are working (averaging 35 hours a week). If you are not working then you must spend fewer than 16 days (including day of arrival and departure) for three years to gain "Not resident for Tax Purposes" status.

Even if you get non-resident status your British earnings i.e. pensions will still be taxed in the UK, however I believe that if you take up residency in the Channel Islands different rules apply and you might be able to get your private pension transfered to a CI manager and pay CI tax. Best to get professional advice if your income is substantial.

I think that a lot of cruisers essentially opay UK tax and make visits home so that yyou retain the right to use the NHS and so that your state pension does not get frozen. You have to think carefully before you do anything.

One other consideration is that when the government changes they are quite likely to re-introduce capital transfer tax which will make gifts of UK assets a taxable event to the recipient. This tax was abolished in the first Thatcher government, given the hard left agenda I suspect that this might also impact your cruising plans and re-aligining your residency might be an advantage.

 

[spindly_killer_fish]

My thinking wasnt that advanced, it was just that if im not working and just relying on pension income, and not resident anywhere, why do i need to pay tax.

 

[PlanB]

My thinking wasnt that advanced, it was just that if im not working and just relying on pension income, and not resident anywhere, why do i need to pay tax.

I'm not sure how you are defining resident. For example, if you are in Spain for more than 183 days in a year, you are counted as resident for tax purposes.

 

[spindly_killer_fish]

My plan is to just travel, from country to country, island to island. im not settling anywhere until i get fed up, in which case i will be settled in Thailand, that could be 2 years or 20 years.

That being said, I suppose its all moot as i will need a paid for a UK address for banking etc.

 

[PlanB]

Further up this thread someone warned of the difficulties of being non-res and the advisability of proper advice.
For example - from Gov.UK as regards non-res for Uk tax purposes:
How to be non-resident for tax in the UK?
You're usually non-resident if either:

1. you spent fewer than 16 days in the UK (or 46 days if you have not been a UK resident for the 3 previous tax years)
2. you worked abroad full-time (averaging at least 35 hours a week), and spent fewer than 91 days in the UK, of which no more than 30 were spent working.

Other countries will have their own rules - you normally have to actually be non-res somewhere. But see this anecdotal info Not a resident in any country - What are your experiences?

You could try flying under the radar, but if you are banking in the UK, as you say, it's all moot..........................................

 

[GHA]

Further up this thread someone warned of the difficulties of being non-res and the advisability of proper advice.
For example - from Gov.UK as regards non-res for Uk tax purposes:
How to be non-resident for tax in the UK?
You're usually non-resident if either:

1. you spent fewer than 16 days in the UK (or 46 days if you have not been a UK resident for the 3 previous tax years)
2. you worked abroad full-time (averaging at least 35 hours a week), and spent fewer than 91 days in the UK, of which no more than 30 were spent working.

Other countries will have their own rules - you normally have to actually be non-res somewhere. But see this anecdotal info Not a resident in any country - What are your experiences?

You could try flying under the radar, but if you are banking in the UK, as you say, it's all moot..........................................

UK non res criteria are far more involved than that though.
And full time cruising in many ways it's actually more difficult to have residency anywhere than not, I haven't for years, no one cares out in the real world, maybe if you're a football manager or pop star, but cheapo living on the hook cruisers, no one is that interested, anyway it's not against any rules when you're on the go all the time.
Though the practicalities would be more difficult without a UK address for bank cards, driving license etc. Even Revolut need to send the card somewhere

 

[Trident]

My plan is to just travel, from country to country, island to island. im not settling anywhere until i get fed up, in which case i will be settled in Thailand, that could be 2 years or 20 years.

That being said, I suppose its all moot as i will need a paid for a UK address for banking etc.

My bank address, GP address etc for the last 12 years has been the office of the broker I bought my first boat from. As I already was in the system (GP, bank etc) they just accepted the change of address without needing proof of address or anything else and I chose "no paper statements" online so I get no mail there at all but its fine as an address.

It's also the address HMRC have. No one cares
The only document I didn't change was my paper driving license because I was sailing off to the Med and didn't want to send it away. It is technically illegal to not update them on address but "catamaran, middle of Ocean" didn't cut it either so a minor infraction to keep a license I can show to hire cars wherever I need to seems ok.

 

[Sandy]

I imagine this is going to have a very small audience, but if you left the UK to go cruising for a few years and you still receive an income (pension etc.) I assume you would not need to pay tax on that regardless of how much as you would be non tax resident. Would that be a correct assumption?

My wife is an accountant, who once worked for one of the Big 4, she suggests you visit a specialist tax accountant and then HMRC. Make sure you have everything in writing.

 

[billskip]

Don't forget if you leave the UK your state pension will stop going up by the "triple lock" -

It depends where he goes...it is transferable keeping the Anual increase with some other countries...

Also it is possible to retain a bank account in the UK....it is not possible to open a new one or open new investments or ISA's though.

 

[Zing]

My thinking wasnt that advanced, it was just that if im not working and just relying on pension income, and not resident anywhere, why do i need to pay tax.

Rules are complicated, but surmountable. A UK address is important for banking, getting documents, access to the NHS for all that is worth and access to professional services etc. To keep one you may have to fudge that you are resident in the UK. Tax residence and residence as in having an address to live in are different things and generally no questions are asked re definitions. A room rented from a relative or friend, where as rent you pay the water bill would be fine. It also gives you a bill as proof of identity. Something you will have to prove to bureaucrats, bankers, lawyers etc from time to time.

As for tax residence there is a statutory residence test. See HMRC’s website. It’s simple, but lots of hidden gotchas, so do pay a pro to hold your hand or whatever.

If you can move income offshore and become non resident you can keep the grubby HMRC off it, but not pensions, again complicated, but if you move for employment it might be transferable, otherwise, they have got you, subject to dual tax treaties, which can be really good depending on where you go. A lot of UK income sources are at basic rate only or equivalent in withholding taxes to non-residents. So not all is lost. Of course a questionable price to pay for that lovely blue passport and having UK assets. Then again, most countries have withholding taxes, so it is very tough to get to zero.

Good luck. Let us know your plan.

 

[wonkywinch]

Don't forget if you leave the UK your state pension will stop going up by the "triple lock" - that will mean it's value will decrease rapidly. If all your income in UK is state pension then it is not taxed at all at the moment - that is likely to change very soon but I will get banned for mentioning it.

Only if you move to a country without a reciprocal agreement.

Getting your UK State Pension if you live outside the UK
Usually you can get your State Pension paid anywhere you live. However, if you live outside the UK and get a UK State Pension, it will only be increased yearly if you live in:

> a country that belongs to the European Economic Area,
> Switzerland or,
> a country that has an agreement with the UK that allows for annual increases.

https://assets.publishing.service.g...le/584031/Going_to_Live_Abroad_web_130117.pdf

The taxation or not of the state pension are not really related. There is a personal tax allowance of £12,570. The state pension generally used to be lower than that so no tax was due but there is no relationship between the SP and tax rules, just so happens the SP is now nudging over the allowance due to triple lock increasing it and the fiscal drag of the personal allowance not being increased for more than 4 years.

 

[billskip]

The taxation or not of the state pension are not really related.

In as much, I believe, that the state pension tax is deducted at source if you live in UK, but not taxable if you don't, it is then your responsibility to advise the relevant tax authority.