Proposed Change to UK Property Rental Tax

[arh]

Hi,

I guess this proposed change will impact many here who rent out property in the UK to fund a liveaboard life overseas.

www.telegraph.co.uk/finance/persona...1027075/Expats-face-400-million-tax-raid.html

As an expat for the last 18 years I have become increasingly concerned that non-residents are an easy target for such tax raids.

Tony

 

[charles_reed]

Seems a slightly hysteric note by the DT.

If you pay tax in the UK you'll retain the allowance - if you don't then you're not tax-resident and you can't have an allowance.

 

[Chris_Robb]

Seems a slightly hysteric note by the DT.

If you pay tax in the UK you'll retain the allowance - if you don't then you're not tax-resident and you can't have an allowance.

Sounds fare to me too

 

[Tranona]

The DT likes to put these scares on its front page to appeal to a tiny minority of its readership. Helps fill the letters page with responses from "Disenchanted of Dubai" - or wherever the tax avoiders live.

 

[Richard10002]

Given that the highest tax rate is 40%, we are talking about £4k a year max.

I would tend to suggest that if £4k makes the difference between being able to survive abroad and not, perhaps they should come home. In cases where the difference is critical, the tax relief is probably only £2k.

Not sure how selling the properties can be the answer. I'd guess that the risks and returns of an investment with fee taking spivs would be greater and lesser respectively

He's got to collect his money from somewhere, so why not the odd £4k from people living abroad, but cashing in on UK assets.

 

[GrahamM376]

Given that the highest tax rate is 40%, we are talking about £4k a year max.

I would tend to suggest that if £4k makes the difference between being able to survive abroad and not, perhaps they should come home. In cases where the difference is critical, the tax relief is probably only £2k.

Not sure how selling the properties can be the answer. I'd guess that the risks and returns of an investment with fee taking spivs would be greater and lesser respectively

He's got to collect his money from somewhere, so why not the odd £4k from people living abroad, but cashing in on UK assets.

Chances are that a married couple drawing state & private pensions plus property rental income are UK tax payers. However, it does sound as if in cases where people spend less than 6 months in the UK, they will lose their tax code. Under the changes, as their rented out property is no longer their primary dwelling, it "could" also be subject to capital gains tax if/when sold, unless they return to take up residence again beforehand.

I'm just waiting for the day the Customs and Revenue have access to Border Control database to check up on exactly how long we are away.

 

[telford_mike]

I'm just waiting for the day the Customs and Revenue have access to Border Control database to check up on exactly how long we are away.

Exactly. At the moment they only know what we choose to tell them.

 

[temptress]

Exactly. At the moment they only know what we choose to tell them.

and there is the differance between avoidance and evasion. One is legal the other not, if they do catch you then you face fines and jail. It's up to you.

 

[bob234]

Seems a slightly hysteric note by the DT.

If you pay tax in the UK you'll retain the allowance - if you don't then you're not tax-resident and you can't have an allowance.

I don't think that's true Charles. I pay tax in the UK because my income arises in the UK (company pension and rental income). But I spend more than half the year away as a liveaboard so am non resident for tax. I believe the article is saying I would lose my allowances. Losing tax allowances would certainly make a difference to me.

 

[GrahamM376]

This document explains the current situation about tax residence- http://www.hmrc.gov.uk/international/residence.htm

The whole residence situation is getting crazy, Despite having a house (not rented out), being on the electoral role etc. I was refused car insurance with one company when I stupidly admitted to not being in the UK for the previous 6 months. Try opening a new bank account or an ISA if they know how long you're absent. They're screwing those of us who've paid tens of thousands in taxes over the years to support immigrants and social services work dodgers.

 

[bob234]

I don't think that's true Charles. I pay tax in the UK because my income arises in the UK (company pension and rental income). But I spend more than half the year away as a liveaboard so am non resident for tax. I believe the article is saying I would lose my allowances. Losing tax allowances would certainly make a difference to me.

I have had a close look at the proposals now and it is not so alarming for what I suspect is most UK liveaboard situations. The aim is still to remove personal allowances for non-residents as the default position but the favoured option being considered is to introduce an economic test such that if the great majority of your worldwide income arises and is taxed in the UK (as in the example above) you would keep the allowance.

So if only some of your worldwide income is taxed in the UK you won't get allowances but if it's the great majority of your worldwide income then you would still enjoy personal allowances. The logic is that those whose income is mainly outside the UK enjoy personal allowances in another country and get double taxation relief on their UK tax anyway.

It's only at the consultation stage but the tone of the document is good.