Isle of Man

[tim123]

Tax tips:
Only whole days spent in the UK count towards the 90 or 183 day thresholds. The day of arrival in the UK and the day of departure are not counted as days spent in the UK.
It is possible to spend 180 days in the UK in one tax year and then another 180 days in the next tax year without being considered tax resident in the UK. However, care must be taken not to become ordinarily resident for tax in the UK.

So, it's not entirely straight forward, but it is perfectly possible to do.

It's what that nice Mr Green (the one with the hundred million pound salary and no tax to pay) apparently does.

He flys in from Monaco on day one, flys back home on day three and only
one day counts towards his residency. So he gets most of his salary tax free in the UK because he's only 'offically' there for 50 days but is actually there for 150 days per year (which isn't much less than someone who is permanently resident will work).

tim

[ladymuck]

So, assuming I have understood DaveB's last post and the doc he linked to, because the 90-day rule is an average over 4 tax years you couldn't be free of UK tax immediately on taking up residence in IoM, because of your previous residency in the UK for the tax years preceding it. A bit of a cheek really!

I wonder if a good tax accountant can weedle a way round that?? When I get five mins to obtain some official advice, I'll you all know!

[ladymuck]

It's what that nice Mr Green (the one with the hundred million pound salary and no tax to pay) apparently does.

He flys in from Monaco on day one, flys back home on day three and only
one day counts towards his residency. So he gets most of his salary tax free in the UK because he's only 'offically' there for 50 days but is actually there for 150 days per year (which isn't much less than someone who is permanently resident will work).

tim

That and most of his divs are paid to his wife, who is wholly resident in Monaco and doesn't look like she's worked a day in her life!

[DaveB]

So, assuming I have understood DaveB's last post and the doc he linked to, because the 90-day rule is an average over 4 tax years you couldn't be free of UK tax immediately on taking up residence in IoM, because of your previous residency in the UK for the tax years preceding it. A bit of a cheek really!

I wonder if a good tax accountant can weedle a way round that?? When I get five mins to obtain some official advice, I'll you all know!

You could always spend a yead dead, for tax purposes.....

[ladymuck]

You could always spend a yead dead, for tax purposes.....

In this case, three years!

[ASB]

One of the problems with the 90 day rule (and it's what stuffed me when I was working mainly abroad) is that if you are already ordinarily resident then you remain ordinarily resident until you have been out for a full tax year.

And guess what doesn't apply if you are ordinarily resident

So, incorporate in the IoM and operate from there. But if you spend ANY time in the UK and have been resident here you probably still will be.

There is also a review of domincile and residency etc for tax purposes going on at the moment. The net result of this is likely to be stricter rules.

[DimPrawn]

Best just to **** off out of the UK completely and operate in non UK markets only.

[tim123]

So, assuming I have understood DaveB's last post and the doc he linked to, because the 90-day rule is an average over 4 tax years you couldn't be free of UK tax immediately on taking up residence in IoM, because of your previous residency in the UK for the tax years preceding it. A bit of a cheek really!

You miss-understand.

You are non resident immediately (the day after) you leave the UK.

But they can't actually determine that you will gain and keep this status until you have been away a full tax year (or more) so that they can work out the average days in the UK.

Your tax status will remain in limbo until they know, though usually the IR will issue you with an NT status as soon as you convince them that you won't be coming back. But you don't lose any of the benefits just because they don't know.

tim

[Mailman]

Yeah but Gordon will then look on you as being a tax evader!

Mailman

[The Lone Gunman]

You are non resident immediately (the day after) you leave the UK.

That is not true. You remain tax resident in the UK untill you have become tax resident elsewhere. As someone said above, you effectively have to be outside the UK for a whole tax year before being considered non resident.