Tax abroad

In many countries, perhaps all EU countries, there's a concept of 'ordinarily resident', which is used to determine to whom you pay taxes (and from whom you may claim sundry benefits). It's somewhat hard to define. As nimbusgb writes, where one earns one's income is often, but not always, a major factor.
 
If you are a UK tax payer then four months in three countries doesn't attract local taxes so you continue to pay tax in the UK. If you qualify for not resident or not ordinarily resident you still pay UK tax if you are not paying tax abroad. However if you are away for more than four years before you return you can sell a house without paying capital gains tax, which we did.
 
youen said:
Sorry but infortunately I am French
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The default is that you will be taxed in France if your income is there. However, although that is a general statement the actual situation depends on your personal circumstances so you need to take professional advice. For most people with relatively straightforward financial situations it is normal to stay tax resident in the state where they have income and assets such as property. Your status can also have implications in other ways such as access to healthcare and social services.
 
nimbusgb said:
All fine and well until one day ......... they ask!

Cue 'much weeping and gnashing of teeth' and declarations of 'but I didn't know' !
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Unlikely. As we pay UK tax, we would be exempt here anyway, just don't see the point in form filling a load of zeros. 'er indoors is Portuguese and has never filed any returns so I'll let her sort it out if they do descend on us.
 
Common problem this one .One should register with EU Dept of Revenue , Brussels and fill out the appropriate forms . Tax will then be worked out on a pro rata basis and paid directly to the EU for distribution to the aforementioned countries . Remember that whilst cruising it is vital for admission to some countries to have a domicile address and for this reason the Queen should not be forgotten in your distribution of revenue .
 
I suppose rules change.
Once upon a time.
There were two different ways where a British citizen. Did not have to pay British tax.

1 was non resident, which is what it sounds like you live and work somewhere else. Usually liable for tax there. Some places may not charge income tax or the rate is very low.

Perfectly legal and above board. No need to file anything.

I would be interested to know how it might work if your are a UK resident as in have an address there and you take of for a year on an extended cruise. If you collect a pension so you are not working abroad. Just traveling.
Using the same rules could you file a return and claim the exemption?

One other little note if you do decide to become non resident. Tell the tax man.

I didn’t. left the Uk moved to Canada. 3 years later HM tax man put an arrest warrant out on me for tax evasion.
Took some sorting. Fortunately I had my Canadian documents with me and I could prove I didn’t live or work in the UK.
I just got a *******ing for not telling them I had left.
 
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You will remain tax resident where ever you are until you can bring proof that you are tax resident elsewhere.

If you go off for a 2 year round the world cruise you will remain tax resident in the UK - just being away and not having any property in the UK is not sufficient to become non resident to HMRC's satisfaction.

The only things which are certain in life are taxes and death.
I am not so sure about the second one though......
 
michaelchapman said:
You will remain tax resident where ever you are until you can bring proof that you are tax resident elsewhere.

If you go off for a 2 year round the world cruise you will remain tax resident in the UK - just being away and not having any property in the UK is not sufficient to become non resident to HMRC's satisfaction.
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Are you sure about that?
Things must have changed recently. I know then criteria for being non resident have been tightened but doubt that the prove being tax resident elsewhere applies. A few years ago when I was away for an extended period they didn't care what I did or where I was was so long as the non resident criteria were met and any income arising for duties carried out within the UK was declared. Outside income they didn't care even if working for a UK company.
Can you provide a link about having to prove having to prove being tax resident elsewhere? Sorry, I think you're mistaken but could be wrong.
 
GHA said:
Are you sure about that?
Things must have changed recently. I know then criteria for being non resident have been tightened but doubt that the prove being tax resident elsewhere applies. A few years ago when I was away for an extended period they didn't care what I did or where I was was so long as the non resident criteria were met and any income arising for duties carried out within the UK was declared. Outside income they didn't care even if working for a UK company.
Can you provide a link about having to prove having to prove being tax resident elsewhere? Sorry, I think you're mistaken but could be wrong.
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For instance from HMRC:-

HMRC said:
For example, if your absence was for a
one-off year long holiday after which your residence in the UK resumed its
previous pattern, you would remain UK resident during your absence.
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More details here:-
http://www.hmrc.gov.uk/cnr/hmrc6.pdf

If you have income, I doubt you can get away with not being resident anywhere - but the rules are unclear, but there always seems to be a get out clause where HMRC can get you.
 
michaelchapman;4591139 If you have income said:
It was definitely possible just recently., this was from meetings with hmrc. And keeping on the move. The important bit was definitely being non resident with no ties and not just being on a big long holiday. Satisfy that they didn't care. Probably different if you are a football manager. :) and unless you're earning a load and can keep on the move then maybe not much point, you lose lots of benefits as well.
A quick scan of those links didn't come up with anything about having to prove tax residence elsewhere.
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This is a complex area and it depends which tax you are talking about. As an example, a UK private pension is normally taxable by law in the UK regardless of where you live.

However, most countries have Double Tax Agreements (DTA) with the UK which can override this basic rule but for this to happen you have to prove that you are resident elsewhere. The idea behind a DTA is to avoid a person being taxed in two countries on the same income. In Malaysia, for example, we registered for Malay tax which taxed our private pensions at 0%. The DTA between Malaysia and the UK provided that our pensions should only be taxed in Malaysia so we live tax free.

As you would expect, there are lots of caveats and, in my experience, not many advisers who can help you out. I found forums notoriously bad for advice!
 
youen said:
How are you tax in the Eec if you spent 4 months in France,4 in Spain and 4 in Portugal
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If you stay within the EU, and you're an EU resident, your tax residence will be in your country of origin unless you spend more than 182 days in 365/a tax year/a calendar year in one other EU country. At that stage, you automatically become tax resident in that new country. The "new" country is entitled to assume you are tax resident if you are unable to prove otherwise. Your country of official tax residence will normally issue a document (on request) saying you make regular tax returns there.

Within the EU you should always pay tax in each country in which income arises. Changing tax residence within the EU merely means that tax already paid in another country will be taken into account as a tax credit if you declare your total income in your country of tax residence.

More about this, together with links to official sources, in http://www.jimbsail.info/going-foreign/time-abroad.
 
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