January 18, 2013

Expats make financial plans for moving overseas

One in ten British people live overseas and the number is rising according to official figures. If you are thinking of moving abroad then plan your finances and taxes carefully and seek advice from a qualified expat tax adviser.

What with the British weather and the state of the economy more and more people are planning a move overseas. The following expat financial planning steps are for guidance only:

Serious expats make financial plans before moving overseas

If you are thinking of joining the ‘expat club’ then the first thing is to pay off debts and reduce the risk of currency fluctuations increasing the cost of your debts.

Make a plan to organise your bank accounts. Contact your bank to inform them about your emigration plans but hold onto your UK account. Ask the bank for a letter of reference if you are planning to rent in your new country of residence.

Research international bank accounts before you go. Being able to bank in different currencies is useful if you have ongoing financial commitments in the UK. You can hold an international account alongside your existing finances and take advantage of international savings accounts for those planning to invest.

Expats can benefit from currency fluctuations but they can impact your spending power too. You may decide to keep some sterling rather than move all your money to the new local currency.

To avoid paying tax twice – once in the UK and again in the country of residence find an accountant experienced in expat tax matters or a qualified tax adviser. Either will be able to help you navigate the complex tax arrangements and advise on double tax agreements that show which jurisdiction applies to your circumstances. They will also be able to make sense of the proposed new UK residence status rules and Statutory Residence Test once effective from April 2013.

If you wish to discuss this blog in more detail then contact me on 01344 620 495 or mark.busby@dbsellek.co.uk

Important - we endeavour to keep the information on this Site and the Blog accurate and up-to-date as far as possible. However, please remember the content is intended as a helpful guide only and may be subject to change at any time. Please always seek advice from your accountant or Davis Burton Sellek before acting on any of the information provided.



October 28, 2011

Non-domicile reform: how will this impact residency status and remittance?

In the Spring Budget this year, Chancellor George Osborne announced individuals with seven years of non-dom status would continue to pay the £30,000 levy annually. However, he also announced a new £50,000 annual charge next April for overseas non-domiciles resident in at least 12 of the preceding 14 tax years.  The Government’s Non-Domicile Reform consultation document was then delayed by the Gaines-Cooper residency case and has completely changed accountants’ views on residency.  Here’s what’s been happening:

The non-domicile reform: what does this mean?

Summer 2011 saw HM Revenue & Customs, HM Treasury and the Government publish a consultation paper called “The reform of the taxation of non-domiciled individuals.” In essence this consultation is focusing on the taxation of non-domiciled individuals and a statutory definition of non-residence.

Changes to taxation of non-domiciles

Non-domiciles can claim tax on what is called the remittance basis and from 2008 an annual remittance charge of £30,000 was introduced. The £30,000 charge will be retained for non-doms resident for seven tax years. From 6 April next year, a new £50,000 charge will be introduced for those who wish to retain their non dom status and have been non-domiciled for at least 12 tax years.

The Gaines-Cooper case

October 20th saw the Supreme Court side with HMRC and throw out Mr Gaines-Cooper’s residence status challenge. This high profile case has created uncertainty over when the taxman would treat a taxpayer as a non-resident.The Government’s consultation on the introduction of a simple and transparent residency test is now more important than ever.

Changes to Tax residency rules

HM Revenue and Customs is proposing to change the counting system for determining residency and changes to the non-domicile taxation. The counting issue could affect expatriates and how much time they spend in the UK. Under new proposals the day of arrival and departure will count.

The Gaines-Cooper case outcome tells accountants we can’t maintain the view on residency status that we’ve held for last 10 years. Anyone looking at exit planning will need to wait for the Government’s legislation on residency in the next Budget.

Important - we endeavour to keep the information on this Site and the Blog accurate and up-to-date as far as possible. However, please remember the content is intended as a helpful guide only and may be subject to change at any time. Please always seek advice from your accountant or Davis Burton Sellek before acting on any of the information provided.

Written by Mark Busby @ 12:38 pm


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