Residency and Tax

[NauticalNovice]

Assume the following conditions :-

a) Live permanently aboard
b) Travel extensively (mainly in the Med)
c) Never spend more than 90 days in any calendar year in the territorial waters of any one country

Questions :-

1) Do you have to declare "Residency" and if you do where do you declare "Residency"?
2) Are you liable for tax. If you are why are you liable and where do you pay tax?
3) Do you need documented proof to show that you spent 90 days or less in the territorial waters of all the countries that you visited in the calendar year?

Thanks for any advice

NN

 

[Tranona]

Impossible to answer your questions. For a start, 90 days in one country has no significance from either a residence or taxation point of view.

If you are a UK citizen or have income in the UK then you will be taxed in the UK. It is possible to become non resident but there are conditions to meet. You can also become resident for tax purposes in another country but you may still be taxed on any UK income.

As you would expect it is very difficult to legally avoid paying tax or being resident for tax purposes somewhere, although it may be possible to adopt a strategy to minimize your tax payments. However this will depend on your individual circumstances and you need to take professional advice.

 

[Tony Cross]

I guess it depends on where your money comes from and how you got it?

 

[Talulah]

When selling property you could avoid Capital Gains Tax by being a non-resident and not ordinarily resident. I understand the Chancellors Autumn statement states this is being brought to an end in 2014/2015. No longer will people who are non-resident and not ordinarily resident be exempt from Capital Gains Tax.
The above may affect some peoples plans on selling up.
(I understand the driver for this is foreigners making huge sums on London properties but I could be wrong.)

 

[Retired in Crete]

The simple answer to the OP is that you are domiciled in the country that issued your passport. (Domiciled is different from where you are resident.)

If you have a UK passport you would normally be taxed in the UK unless you are tax resident (you live for more than 6 months) in another country when, irrespective of where your income comes from, you can be taxed. The UK has a double taxation agreement with many countries whereby you will not be taxed in both but if no such arrangement exists you can be taxed in both countries.

The EU changed the laws about 3 years back so that you are taxed in the country where you live. Previously, you were taxed where your income arose.

If you travel extensively you will be taxed where you are domiciled. There is no obligation to prove the other countries you have been to.

Hope this helps

John

 

[temptress]

Assume the following conditions :-

a) Live permanently aboard
b) Travel extensively (mainly in the Med)
c) Never spend more than 90 days in any calendar year in the territorial waters of any one country

Questions :-

1) Do you have to declare "Residency" and if you do where do you declare "Residency"?
2) Are you liable for tax. If you are why are you liable and where do you pay tax?
3) Do you need documented proof to show that you spent 90 days or less in the territorial waters of all the countries that you visited in the calendar year?

Thanks for any advice

NN

So as Taronoa has said it is impossable to answer your questions without much more detailed information and you should seek professional advice form one of the specialist expat tax services.

However having said that you do you do not have to be resident anywhere although you may want to be. That is up to you and it will cause difficulties with paperwork, it will cost if given your circumstances it is possible. You always have to pay tax, generally in the country or countries where you are resident and in some cases in the country where the income is generated (ie Rental income in the UK - and if you are non resident in the UK you cannot usually claim personal allowances).

All this is subjective and what works for one person may not work or even be legal for the next - it is all dependent on your particular personal circumstances and you need professional advice. You also need to be aware that while tax avoidance is perfectly legal the TAX authorities do not like it and they are constantly changing the rules to make things more difficult. It is ll a moving target and please please get professional advice.

 

[temptress]

The simple answer to the OP is that you are domiciled in the country that issued your passport. (Domiciled is different from where you are resident.)

If you have a UK passport you would normally be taxed in the UK unless you are tax resident (you live for more than 6 months) in another country when, irrespective of where your income comes from, you can be taxed. The UK has a double taxation agreement with many countries whereby you will not be taxed in both but if no such arrangement exists you can be taxed in both countries.

The EU changed the laws about 3 years back so that you are taxed in the country where you live. Previously, you were taxed where your income arose.

If you travel extensively you will be taxed where you are domiciled. There is no obligation to prove the other countries you have been to.

Hope this helps

John

John sorry but Domicile is not that straight forward or simple. You cna have a domicile in one country and your passport can come form another - it depends on your personal circumstances. Usually domicile hase nothing to do wiht where or how your pay tax but someties it can.
Hence the need to seek specialist professional advice on these things.

 

[jimbaerselman]

Assume the following conditions :-

a) Live permanently aboard
b) Travel extensively (mainly in the Med)
c) Never spend more than 90 days in any calendar year in the territorial waters of any one country

Much of this is covered in http://www.jimbsail.info/going-foreign/time-abroadhttp://www.jimbsail.info/going-foreign/time-abroad and the links from that page. Hmm. best of luck with the big .pdf file about tax residency!

You missed one question:

4. Do I have to forego SSR registration?

 

[Retired in Crete]

Temptress,

OK then let me rephrase my reply.

If the OP travels extensively he/she must have a passport and therefor be a citizen of some country. That country has the first claim on any tax he should pay.

If he stays in another EU country for more than 6 months then that country can tax him/her and, if they do, he can reclaim the tax paid in the UK provided there is a dual taxation agreement in place.

John

 

[akyaka]

If he stays in another EU country for more than 6 months then that country can tax him/her and, if they do, he can reclaim the tax paid in the UK provided there is a dual taxation agreement in place.

Even if you stay less than 6 months you may still find that your primary point for tax is where the income is generated if you live in a country outside the EU . Mind there can be advantages even if staying more than 6 months. If you are in Turkey you can, with a few exceptions , elect to have your pension(s) including state pension paid gross of UK tax and declare to the Turkish tax authorities where the rate on pensions is 0% .