Non Residency tax advisers?

[RichardS]

We got not resident and not ordinarily resident status, when long distance sailing, you have to be out of the UK for four years with no fixed abode. You will continue to pay UK tax on any income such as property rental. We moved our bank accounts offshore but don't use a European offshore account, such as Jersey, because there is now a 30% withholding tax. If you want our accountant's name and details please PM me.

When I was responsible for the employment of a number of seafarers (crew on luxury yachts normally sailing in the EU but with occasional spells in the USA) I paid them all gross from offshore (Guernsey) through a specialist company in Monaco. All legal but certainly not straightforward.

There was no withholding tax then but I'm talking about 2011-2013.

Richard

 

[GHA]

I have a small public service pension from Ireland and tax is deducted before I receive it. Unfortunately I don't have any other sources of income from Ireland but if I did I'd be fairly sure the same principle would apply - the payee would deduct tax at source and remit it to the revenue. I'd be surprised if it's not the same in the UK.

I've a UK company with me on paye, non res anywhere, not done any work in uk for ages and no ties. Last quarter paye - 64p.

 

[GrahamM376]

I've a UK company with me on paye, non res anywhere, not done any work in uk for ages and no ties. Last quarter paye - 64p.

Presumably you're claiming tax allowance for replacement safety and work gear whilst working on the boat?

 

[GHA]

Presumably you're claiming tax allowance for replacement safety and work gear whilst working on the boat?

Safety flip-flops ain't cheap ! ��

 

[greeny]

Don't forget the tinted safety glasses.

 

[Irish Rover]

I've a UK company with me on paye, non res anywhere, not done any work in uk for ages and no ties. Last quarter paye - 64p.

So many unanswered questions. If you are a shareholder/director in the company then you do have ties. The company has to file tax returns and if these don't accurately reflect the activities of the company then it's headed for trouble and so are the directors/shareholders. If the company is deducting paye from you then that has to reflect your actual salary and your allowances. If the company is paying you but you're not actually working for the company [and I appreciate you haven't said that's the case] then the term ghost employee comes into play and HMRC are wide awake to that type of thing. If you're getting a salary or have other earnings it's very difficult to legally escape paying tax somewhere and becoming more difficult every day especially after the Panama papers disclosures. There are plenty of people around who will tell you they are avoiding tax or paying minimal tax but they are either bluffers, super wealthy who are probably paying their accountants more in a month than most of us earn in 10 years or fans of financial Russian roulette.

 

[GHA]

So many unanswered questions. If you are a shareholder/director in the company then you do have ties. The company has to file tax returns and if these don't accurately reflect the activities of the company then it's headed for trouble and so are the directors/shareholders. If the company is deducting paye from you then that has to reflect your actual salary and your allowances. If the company is paying you but you're not actually working for the company [and I appreciate you haven't said that's the case] then the term ghost employee comes into play and HMRC are wide awake to that type of thing. If you're getting a salary or have other earnings it's very difficult to legally escape paying tax somewhere and becoming more difficult every day especially after the Panama papers disclosures. There are plenty of people around who will tell you they are avoiding tax or paying minimal tax but they are either bluffers, super wealthy who are probably paying their accountants more in a month than most of us earn in 10 years or fans of financial Russian roulette.

Accountant takes care of it all, no more expensive to do company/personal accounts then when resident, tax office know everything . No ties to UK according to tax office criteria for non res. 2nd time around for this, last time did it on my own sole trader, tax office said basically if you meet UK criteria for non res we don't care where you are, we just want our cut of any earnings from activities in the uk. Not very difficult to be non res anywhere cruising, actually *much* more difficult to have any residence status abroad. Should technically be paying in the country where the work took place but that would be an expensive nightmare for a few weeks in dubai /Brazil /South Korea or where ever this years little stint might be. But as mentioned above, much better to speak to the revenue/accountant than some post on a net sailing forum.

 

[Irish Rover]

Accountant takes care of it all, no more expensive to do company/personal accounts then when resident, tax office know everything . No ties to UK according to tax office criteria for non res. 2nd time around for this, last time did it on my own sole trader, tax office said basically if you meet UK criteria for non res we don't care where you are, we just want our cut of any earnings from activities in the uk. Not very difficult to be non res anywhere cruising, actually *much* more difficult to have any residence status abroad. Should technically be paying in the country where the work took place but that would be an expensive nightmare for a few weeks in dubai /Brazil /South Korea or where ever this years little stint might be. But as mentioned above, much better to speak to the revenue/accountant than some post on a net sailing forum.

I think that's what we've been saying although I'm still curious how your company could still have you registered as a paye employee in the UK and pay 64p paye tax for you in 3 months and all this while non resident. Anyway I think we're all agreed - even if you're non-resident you'll still pay tax in the UK on all income earned in the UK.

 

[GrahamM376]

I'm still curious how your company could still have you registered as a paye employee in the UK and pay 64p paye tax for you in 3 months and all this while non resident.

That's where taxation practitioners or accountants who specialize in tax avoidance earn their wages.

 

[lpdsn]

I think that's what we've been saying although I'm still curious how your company could still have you registered as a paye employee in the UK and pay 64p paye tax for you in 3 months and all this while non resident. Anyway I think we're all agreed - even if you're non-resident you'll still pay tax in the UK on all income earned in the UK.

The UK has the concept of 'free pay' so they don't charge income tax on the first £X of earnings. X has grown quite a lot in the last few years to help the low paid and I think it is something over £10,000 these days. I think there's also an additional 'free' allowance for dividends and they don't have the concept of Proprietor Director so he can probably take advantage of that too to get some of his money out as dividends without NI, albeit there's quite a few differences between NI & PRSI and he'll be stung more for what he might take out as a salary.

 

[macd]

If you have become not resident and not ordinarily resident then you will not pay UK tax on income arising elsewhere.

...or, often, on forms of UK income other than rental. It all depends on the precise wording of any double taxation treaty with the new country of residence. UK has about 130 such treaties, with considerable variety between them and little or nothing common to the all. (None of which would apply to the OP of course, if he were to become not resident anywhere.) HMRC publishes an on-line digest of all such treaties.

 

[Irish Rover]

As I understand it the general principle applying to double taxation agreements is that you pay the appropriate tax where the income is earned and this tax can be offset against any potential tax liability you might have in respect of the same income in any other tax jurisdiction which has a DTA with the jurisdiction where the income was earned.

 

[macd]

As I understand it the general principle applying to double taxation agreements...

A general principle is irrelevant if there is specific agreement to the contrary, which there often is. Anyone subject to such a treaty would need to acquaint themselves with the specifics of the relevant treaty.

 

[Irish Rover]

A general principle is irrelevant if there is specific agreement to the contrary, which there often is. Anyone subject to such a treaty would need to acquaint themselves with the specifics of the relevant treaty.

I don't think you and I debating semantics will be of any benefit to the op but my understanding of a general principle is that it generally applies. As a non resident tax payer I've tried to share my experience in case it may be of benefit to the op or others but if you have more detailed or relevant experience or knowledge I'd be keen to learn from you.

 

[lpdsn]

I don't think you and I debating semantics will be of any benefit to the op but my understanding of a general principle is that it generally applies. As a non resident tax payer I've tried to share my experience in case it may be of benefit to the op or others but if you have more detailed or relevant experience or knowledge I'd be keen to learn from you.

As a general principle the specifics of a double-taxation treaty do trump vague general principles. If it is sufficiently important to you, find someone with the specialist knowledge for the situation you're in. It's not an area where you can wing it using advice from a non specialist internet forum.

 

[macd]

Fair enough, Irish Rover. I've been tax resident in one country other than the UK and am about to be tax resident in another. In both cases all forms of my UK income are taxed in the new country of residence. Had I UK rental income, however, that would be taxed in the UK. The latter is commonplace in many other countries.

The tax digest I mentioned earlier is available on-line at the link below. Although I've no inclination to assess every treaty, your 'general principle' seems heavily honoured in the breach.
https://www.google.co.uk/url?sa=t&r...Nov_2017.pdf&usg=AOvVaw2zO51KqLUL7sWfThOW1QJz

 

[Irish Rover]

Fair enough, Irish Rover. I've been tax resident in one country other than the UK and am about to be tax resident in another. In both cases all forms of my UK income are taxed in the new country of residence. Had I UK rental income, however, that would be taxed in the UK. The latter is commonplace in many other countries.

The tax digest I mentioned earlier is available on-line at the link below. Although I've no inclination to assess every treaty, your 'general principle' seems heavily honoured in the breach.
https://www.google.co.uk/url?sa=t&r...Nov_2017.pdf&usg=AOvVaw2zO51KqLUL7sWfThOW1QJz

Excellent and very informative. Thank you.

 

[Sailfree]

We looked at doing this but decided it's best to keep UK residence, particularly as we're getting older and more likely to need medical care at some point. Portugal is certainly a place not to wind up in hospital. Friends returning to UK after declaring their absence for several years say they have less rights than newly arrived immigrants.

Here on the silver Coast are complimentary about Portuguese Health Service. A recent independent survey of over 300 countries Health Service put Portugal at 14th ahead of UK at 15th. Reported in the English version of the Portuguese news.

 

[GrahamM376]

Here on the silver Coast are complimentary about Portuguese Health Service. A recent independent survey of over 300 countries Health Service put Portugal at 14th ahead of UK at 15th. Reported in the English version of the Portuguese news.

We've had quite a lot of experience of hospitals in the Lisbon area with elderly relatives and Faro with expats. Faro is often on the TV news showing often naked elderly patients dumped in corridors on trolleys. Sandyman wound up in intensive care here after a stroke and was treated well but the ward he was moved to afterwards was a nightmare - large, crowded, noisy and understaffed. He ended up discharging himself against medical advice, not too happy with dead patients in adjacent beds - I'd have thought better than ones who snore though

Although I'm registered in the health system with a GP near Lisbon, have been refused treatment at Centro de Saude here and told to go to emergency which has about a 20 hour wait for non urgent and it's not even tourist season yet.

 

[Tranona]

When I was on dialysis many of the nurses were Portuguese and when asked why, the response was usually along the lines of "have you ever been in hospital in Portugal?". They did make an exception about Madeira, though.