Tax on Earnings Overseas

[LisaContractorUmbrella]

http://www.telegraph.co.uk/finance/p...tax-bills.html

I think this is the article the OP is refering to - a businessman who lived mainly in the Seychelles relied on guidance issued in IR20 regarding his tax residency. The case went to court as HMR&C claimed that he was tax resident in the UK as he still had ties here. It seems that IR20 (living 90 days or less in UK during a tax year) has been withdrawn but has not been replaced which has left everything a little unclear - except for this chap who is facing a £30 million tax bill

[questiontime]

In you're working in a country with a Double Taxation Treaty, then it doesn't matter anyway because you're only taxed once.

i think it does matter still..if you are working in a country with lower level of taxes than the uk, then you end up with the difference here. in the case of dubai, it is the difference between uk tax and 0.

when taking a contract abroad, it is important to ensure you consider the overall tax and not the tax in that country. that's where many newbies get caught.

[AnthonyQuinn]

tax avoidance

you guys seem to have assumed that i am evading tax. the only reason i am pissed off is that i cant avoid it because of this overbearing law. i get benefits for being married in the US. these are taken away because my wife works in the UK. :-(

[LisaContractorUmbrella]

What exactly is your situation AnthonyQuinn?

[AnthonyQuinn]

What exactly is your situation AnthonyQuinn?

I am English with a house and family here. Working in Seattle, WA which has no state tax. Tax bracket is 30%. But married folks get a tax rate if 25% and those with 2 kids are effectively taxed 20%. I wont get into the complex calculations here.

My wife and kids are here. I visit for a week every 6 weeks. Wife works here and pay Hector his pound of flesh.

Problem is that Hector is asking me to pay 40% (my tax band here) - 20% (tax paid in the US). I feel its none of his business. Your thoughts please?

[LisaContractorUmbrella]

I am English with a house and family here. Working in Seattle, WA which has no state tax. Tax bracket is 30%. But married folks get a tax rate if 25% and those with 2 kids are effectively taxed 20%. I wont get into the complex calculations here.

My wife and kids are here. I visit for a week every 6 weeks. Wife works here and pay Hector his pound of flesh.

Problem is that Hector is asking me to pay 40% (my tax band here) - 20% (tax paid in the US). I feel its none of his business. Your thoughts please?

I don't like to be the bearer of bad news but I think that you will have to pay the additional tax in the UK as you have not given up residency. Under new (draft) legislation if you have interests in the UK, whether business or personal, and visit on a regular basis you will be considered to be resident for tax purposes. I think the article I posted here has more detail.

[Fred Bloggs]

I don't like to be the bearer of bad news but I think that you will have to pay the additional tax in the UK as you have not given up residency. Under new (draft) legislation if you have interests in the UK, whether business or personal, and visit on a regular basis you will be considered to be resident for tax purposes. I think the article I posted here has more detail.

Many folk would say, that's quite right too.

[expat]

Many folk would say, that's quite right too.

I am afraid so. IMHO if you are resident in a country, it is reasonable to have to pay tax there. Pretty much all countries work on this principle. Most also give you credit for tax legitimately paid elsewhere, which IMHO is only fair. But there is no real reason why a country that you are liable for tax in should let you off with tax that you are liable for but have not actually paid elsewhere.

If you want WA taxes only, up sticks and move there 100%. Sorry, I'm not trying to be nasty but it seems obvious to me.

[Fred Bloggs]

I am afraid so. IMHO if you are resident in a country, it is reasonable to have to pay tax there. Pretty much all countries work on this principle. Most also give you credit for tax legitimately paid elsewhere, which IMHO is only fair. But there is no real reason why a country that you are liable for tax in should let you off with tax that you are liable for but have not actually paid elsewhere.

If you want WA taxes only, up sticks and move there 100%. Sorry, I'm not trying to be nasty but it seems obvious to me.

Correct. Same for all of us.

[BlasterBates]

I am English with a house and family here. Working in Seattle, WA which has no state tax. Tax bracket is 30%. But married folks get a tax rate if 25% and those with 2 kids are effectively taxed 20%. I wont get into the complex calculations here.

My wife and kids are here. I visit for a week every 6 weeks. Wife works here and pay Hector his pound of flesh.

Problem is that Hector is asking me to pay 40% (my tax band here) - 20% (tax paid in the US). I feel its none of his business. Your thoughts please?

If your income is employment income they shouldn't charge a topup tax

http://www.hmrc.gov.uk/international/usa-index.htm

They may well try, so see an expert accountant. You should pay no UK tax on your employment income.

I stress this is emplyoement income, if you pay yourself dividends then this is sibject to a topup tax.