leaving blighty for keeps, what about the tax?

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rtchina

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Sold the house, bought the boat now I'm off and won't be back. Do I pay tax anywhere? I guess ultimately I will buy somewhere it the sun but until then, I won't be resident anywhere so, no tax on the pension. Is that correct? HELP
 
If you send me a sum equivalent to your last five years' tax, I'll hold it in escrow for you pending HMRC's clearance of your affairs. My charges are very reasonable.....
 
I think you will find that, unless you pay tax elsewhere, your pension will be taxed at source by HMIR&C - just like mine is.

Paul
 
There's the question of where you're domiciled, where you're ordinarily resident and where you are resident so it's not that easy to escape.

Best speak to an accountant, and especially to choose one who understands the double taxation treaty that affects the country (if any) where you're going to be resident.
 
Claim your residency is Anguilla or St.Kitts and Nevis, so that you are a non-UN resident.

You could possibly use my apt address. /forums/images/graemlins/cool.gif

You can get a P. O. Box number as well. /forums/images/graemlins/cool.gif

Both are '0' rated income tax. /forums/images/graemlins/cool.gif /forums/images/graemlins/shocked.gif
 
Be very careful about chosing a country to be domociled in.

A friend in Spain recently had her husband die suddenly. Their joint account was frozen as there was no will. Ultimately she willbe able to access half the balance.

The suddeness of the authorities actions caused her considerable financial difficulties.

As others have said sort out a country to be domociled in that has nice laws upon the death of a partner in addition to good inheritance tax laws plus good income tax laws plus does not affect your pension. eg in South Africa your UK state pension is frozen from the date that you start to receive it (but not in any EU country - you get the annual increases.

Lastly make sure of your entitlement to health care in any country you are domociled in.

Not easy is it?
 
[ QUOTE ]
Sold the house, bought the boat now I'm off and won't be back. Do I pay tax anywhere? I guess ultimately I will buy somewhere it the sun but until then, I won't be resident anywhere so, no tax on the pension. Is that correct? HELP

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Incorrect.

All governments are, by definition, kleptocrats.

You will have to pay tax somewhere, WITH A COUNTRY WHICH HAS A RECIPROCAL TAX TREATY WITH THE UK, for the HMRC to release its grip on you.

Those countries, with no tax on income, generally do not have a reciprocal treaty with HMG.

It would be wise to avoid those countries (Italy or Greece) where tax-avoidance is a national sport. Tax rates and tax-authorities powers are higher and more unconstrained by the rule of law than in UK.

On the whole, if you research the subject thoroughly, you may consider yourself to be privileged in paying UK taxes. This will almost certainly change for the worse in the future - but then we might all have popped our clogs by then.
 
Whatever you do, you will be liable to pay tax on UK income, either at UK rates, or at the rates of a country with a reciprocal agreement. If you can become non resident and not ordinarily resident for 5 years, you may be able to avoid CGT on the sale of UK assets.

It is very difficult to lose your UK domiciled status.

There is an argument that you can be a "nomad" for tax purposes, and not resident anywhere, but I'm not sure I would want to argue the case with the tax authorities. Better to become "resident" somewhere other than the UK if you want to become non resident etc.

I looked seriously at becoming a Maltese resident - would still have to pay UK income tax on UK income, but could avoid the CGT if a Maltese resident for 5 years, (preferably 6 years to be sure it was definitely 5 years). Alternatives were Gibraltar and Monaco, but Gib more expensive to remain resident, and Monaco needed more wealth than I have.
 
My understanding is that the basic rule operated by all nations is that "income is liable to tax in the country from which it derives".

Thus if you are a Brit and have a UK pension or income from UK investments, it will be subject to UK tax. Income can only be remitted untaxed to another country when you have prior notification and agreement with HMRC.

It's difficult to escape them!
 
Is your pension a pot of capital or an income at this point?
Is it possible to export a pot of capital?
 
income tax is determined by residence and you have to be resident somewhere. inheritance tax is determined by domicile which is not easy to change at all and which reverts to UK domicile if you arent domiciled elsewhere. so in short you cant be nowhere - you have to be somewhere.

if you really believed you would never return, then you might be inclined to take what you can out of the UK and simply ignore the tax man. you'd be brave to do so - they might not be able to chase you on the high seas but when you are old and infirm the appeal of the welfare state is great. and its possible they are efficient enough to remember.

getting your pension tax free will be difficult. what you really need is decent tax advice - planning your future finances on the basis of comments on the forum isnt sense.
 
savageseadog: As far as HMRC is concerned you cannot be resident nowhere. It's the one fact I am sure of.

wotayottie: income tax is determined by residence and you have to be resident somewhere.

I don't think this is correct. It certainly wasn't correct a decade ago, as I spent several years not resident anywhere. I know because I didn't pay tax in that time (apart from some withholding tax on dividends) including that due on a large capital gain that HMRC knew all about. As Richard_M44 says you have to convince HMRC that you really have left the UK and won't become tax resident anywhere elese for at least 5 years.
I'm not sure that any of this helps the OP (ej430) because tax on pensions is deducted at source unless you are resident somewhere else covered by a double taxation treaty.
There have been other threads on this subject which are worth a look if only to convince yourself that a lot of the advice given on this forum, sometimes with complete conviction, is nonsense.
 
As an English person living in france I can tell you that - pensions and benefits from the DWP as they are now in the UK arrive without tax deducted, however I do declare my income, including "pension", to the french but still dont pay tax, OK so maybe about 10,000euro pa. is a bit less than all you rich people earn per year but the health service is pretty good here even if you do need topup cover, just as example, waiting time for chest xray was 18HOURS not months!!!!!!!!
Many things to consider but-----------
 
My accountant, sadly he passed away a few years ago, did the biggest favour for me.

He sent letter to HM Tax Office and got agreement that I do not have to complete any tax return, am not taxed on any moneys in UK.
The agreement states that I shall declare myself returned to UK when and if I decide to reside full-time again in UK.

I am still UK resident.

Now I bet some bright spark will say not possible ... well it is. I even used the agreement to stop the "Office of Voluntary Disclosure" from penalising my Offshore accounts 2 years back.
 
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I am still UK resident.

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Not sure what you mean by this. Is it
(a) you are still UK tax resident
(b) you actually live in the UK
(c) something else?
 
[ QUOTE ]
[ QUOTE ]
I am still UK resident.

[/ QUOTE ]

Not sure what you mean by this. Is it
(a) you are still UK tax resident
(b) you actually live in the UK
(c) something else?

[/ QUOTE ]

The actual term is Resident but not Resident. I don't know what the latest wording is - but that's what is on my file.
 
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