UK Taxman / HMRC is on the prowl

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  1. #71

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    Quote Originally Posted by PDLM:
    Again, let's be clear, Gaines spent more time in the UK than in any other country. His wife was ordinarily resident there (I think), he had all sorts of other links far exceeding the links he had to any other country. Whilst I agree that hard limits would be helpful, I don't have much sympathy with his particular case.
    From what I can see, he kept to the absolute letter of the law, and still got punished. I have a lot of sympathy for people who strictly comply with the law and still get the book thrown at them.

    Retrospective changes like this damage the UK's reputation in my view, it makes us look like an incompetent tinpot nation that isn't afraid to unilaterally screw people on obscure and ill defined criteria.

  2. #72

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    There's no suggestion of the law being changed retrospectively. The law is the law at the time you did something (with very, very few exceptions). But unfortunately "Ordinary Residence" is not defined in the law itself. The essence of the British legal system is that it is based on case law, so until someone takes a specific case through the courts things are open to their interpretation of courts.

    There are plenty of documents online which document the HMRC criteria against which they will judge questions of residence, including their in-house manual.


  3. #73

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    I have an ex-wife in the UK and two children (whom I visit) being educated there. I do not yet have HK PR.

    As far as I can see, there is still no statutory definition of residency and domicile. If inheritance tax were to be an issue, where would I stand?

    The Gaines-Cooper case means that I would have to convince HMRC that my domicile of choice supersedes my domicile of origin. In view of the first paragraph that may be difficult.


  4. #74

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    Quote Originally Posted by PDLM:
    For people resident in the UK who have a claim to be domiciled elsewhere then it can also affect Capital Gains tax, I believe (which is the issue with all the Russian billionaires etc wanting to be non-dom whilst living in London, and being prepared to pay a GBP30K/year flat tax in order to be treated that way), but I haven't looked into this in detail because it couldn't affect me.
    It is a little bit more tricky than that. You can exclude all your overseas income if you are a non-dom from the tax bill (you get taxed on what you remit to the UK only). If you have lived in the UK for less than 7 out of 9 years you don't pay anything, more than that you get hit with the GBP 30,000 charge.

    If you are domiciled and resident in the UK you are taxed on your world wide income but with some protection from bilateral tax treaties.

    The other status with a similar treatment is "Not Ordinarily Resident" which was what happened to Mr Tuckza. Which applies to people working (and intending to work) in the UK for a period under 3 years.

    What is scary is the vast amount of disclaimers and wooly language in HMRC's new guide.

    http://www.hmrc.gov.uk/cnr/hmrc6.pdf

  5. #75

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    Quote Originally Posted by shilo507:
    As far as I can see, there is still no statutory definition of residency and domicile. If inheritance tax were to be an issue, where would I stand?
    You wouldn't be standing at all in that situation would you?

    It's probably also going to depend on whether you are married to someone else, and what their domicile is. But I'm really not sure. My attitude to this is that I'm not domiciled in the UK, I have no assets in the UK and frankly HMRC have not a hope in hell of getting at anything of mine.
    Quote Originally Posted by shilo507:
    The Gaines-Cooper case means that I would have to convince HMRC that my domicile of choice supersedes my domicile of origin. In view of the first paragraph that may be difficult.
    The G-C case doesn't change anything in that respect - you would always have had to convince HMRC that you had changed your domicile.

  6. #76

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    Did anyone see the Sunday Morning Post yesterday? It would appear that geoexpat got a bit of a scoop on them...

    Interesting to note that the article was closing in on G-C's residency status as well.


  7. #77

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    FTH - I have it on good authority that the newspapers monitor the forums / blogs looking for story ideas.


  8. #78

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    To be fair though, that column has been running for several weeks covering various aspects of tax planning for expats.


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