Nick Braun/taxcafe

[meridian]

Nick Braun/taxcafe

I can't see HMRC putting up with this. There are a huge number of non-domiciles working in the UK, returning home most weekends and this implies they could all work tax free. No way HMRC would accept it. This is as illusory as having your income as "loans".

Just simply paying into a foreign bank account doesn't make it non-taxable. This is a story incidentally I've heard often and used by contractors to avoid tax in several European countries where it clearly hasn't worked.

The income is generated when the client pays the money and it doesn't matter where this money is transferred to. That would be the starting point for HMRC. Sure, in the same way you can justify offshore loans it would have to be all fought through the courts, but really does the OP want to do that?

I agree in the sense that theoretically it might be accepted by a court after fighting it through several appeals, but then you could say this about onshore contractors battling with HMRC on offshore loans. In other words the inevitable legal costs just outweigh any tenuous potential benefit.

They can put up with it, and they do. Remember that there are two entities on the receiving end here - the contractor's ltd co, which is legally required to pay UK tax on all income earned anywhere as a domiciled and resident taxpayer. And the non-dom director, who is legally required to pay tax on UK-sourced income (such as the ltd's salary and dividends) but not overseas income (such as interest from an overseas savings account) as a non-domiciled but resident UK taxpayer.

For a standard contractor there's little to be gained, but someone with substantial overseas interests would only pay tax on UK generated income.


Edit: just saw ASB said the same thing using only a few words.....

[perlpilot]

Thanks guys. I'll probably get the property tax booklet from them. I'm in the same boat as everyone else (contracting in the UK, all the ltd's income is in the UK) so therefore I probably won't bother getting the overseas book.

Plan B is going to go into effect soon thought, with the first step being buying some land overseas somewhere, perhaps back home.

I'm sure the JS developers who work 95% of the time in France and only come to London to line up new contracts are able do take advantage of that. But that's not my situation at the moment.

[BlasterBates]

You could review the information on hmrc website.

I do not imply that non doms could work tax free. I clearly highlighted overseas income.

Sure I agree with that.

[ASB]

You could review the information on hmrc website.

I do not imply that non doms could work tax free. I clearly highlighted overseas income.

[BlasterBates]

Bb, there is an ability for non dom to be charged on a remittance basis avoiding tax on overseas income if it is not passed into the uk. Uk sourced income engineered to be overseas income would raise the argument you allude to.

I think now you have to pay 50k pa to he categorised in this way.

I havent found the tax cafe guides to fall into the snake oil category.

I can't see HMRC putting up with this. There are a huge number of non-domiciles working in the UK, returning home most weekends and this implies they could all work tax free. No way HMRC would accept it. This is as illusory as having your income as "loans".

Just simply paying into a foreign bank account doesn't make it non-taxable. This is a story incidentally I've heard often and used by contractors to avoid tax in several European countries where it clearly hasn't worked.

The income is generated when the client pays the money and it doesn't matter where this money is transferred to. That would be the starting point for HMRC. Sure, in the same way you can justify offshore loans it would have to be all fought through the courts, but really does the OP want to do that?

I agree in the sense that theoretically it might be accepted by a court after fighting it through several appeals, but then you could say this about onshore contractors battling with HMRC on offshore loans. In other words the inevitable legal costs just outweigh any tenuous potential benefit.

[ASB]

Bb, there is an ability for non dom to be charged on a remittance basis avoiding tax on overseas income if it is not passed into the uk. Uk sourced income engineered to be overseas income would raise the argument you allude to.

I think now you have to pay 50k pa to he categorised in this way.

I havent found the tax cafe guides to fall into the snake oil category.

[BlasterBates]

There is a myth that non-residents are exempt from tax. This is not the case, you are liable for tax from income sourced in the UK.

HM Revenue & Customs: Tax on UK income or capital gains for non-UK residents


If you're thinking about coming to the UK contracting and assuming you're exempt from tax, the answer is no.

Some might argue that you can set up a foreign company and bill from that company and hence it isn't UK income. Well if you get caught you'll probably have a big fight on your hands and it isn't worth it.

Unfortunately there are plenty of sharks making all sorts of claims about avoiding tax using schemes that generally don't work. Having had a quick look at tax cafe and it's suggestion of using offshore trusts, I would put it in that category. There is very little difference between a UK resident putting his UK income through an offshore trust or a non-domiciled resident. As far as HMRC is concerned it's UK income and should be taxed as such. Although there are complex legal arguments the lawyers could use in it's defence, you really don't want to go there.

In the past the very rich non-domiciled residents didn't pay tax on income they derived from overseas sources, i.e. they weren't subject to tax on their worldwide income. However rules have tightened up and I think there is some sort tax charge made. However non-domiciles do pay tax on UK income.

[ASB]

The taxcafe guides are generally pretty good. But there will not be a magic answer of do this and save loads. Your own exact circumstances will govern what you may be able to achieve.

As scruff highlights it is important to get advice specific to your own situation and where your assets and income arise.

[Scruff]

I am domiciled for tax purposes but non-domiciled for estate purposes. You really need to see a properly qualified Accountant if you aren't sure... It could be VERY costly.

[perlpilot]

If you are in the UK and working you are tax resident.

Yah that's what I thought. But apparently it's not that simple or just. Some say all you have to do is say you might kinda like go back to your country of birth. Some people have been pressured to give up their non-dom status.

I realy don't know I'm just trying to make sense of what I'm reading. I know some of this might fall under "you need to talk to an accountant/tax expert" and "idle chat about irrelevant tricks that the rich and the famour do" (if it's the later, perhaps a mod could move the thread to the "idle chat" area). Which is why I was considering getting a book about it. Are there reputable tax expert authors?

[stek]

If you are in the UK and working you are tax resident.

[perlpilot]

Hi guys,

I'm a longtime lurker, reading a lot as I've only been seriously contracting in this country for 20 months now and I don't feel I have much to offer yet for input, and I've so far managed to avoid asking questions that have already been asked.

The other day I was looking into some ideas about a Plan B/doing reskill time seasonally back in Canada, and I came across a book called "Non-resident and offshore tax planning" by Nick Braun from taxcafe.co.uk. It and perhaps some other books he has available might be really useful for things beyond the basic year to year tax planning I do with my ltd.

Has anyone here read any of his stuff? Is he a quack, or really good (worth every penny), or somewhere in between? I haven't seen the topic of good books/writers covered very much, so perhaps if there is another book or auther I should have a look at, I'd love to hear some good ideas before I spend some money in the hopes of getting a valuable resource.

Disclaimer: I certainly have nothing whatsover to do with taxcafe.co.uk or NIck Braun, it just came up in a ddg search when I typed in "non-domiciled foreign residents who work inside the uk" because I had never heard that specific term and it was mentioned in this CUK faq. Sadly there's no public information (that I can google) to tell me exactly what the deal with non-domiciled is, under the new rules. Some confusing thing about if you're really rich and your wife and kids still live in the UK, you can't claim to be non-domiciled because you haven't "made a clean break" or whatever. Not really the point of this thread because I'm still technically a Canadian anyways..... so yah, what about this guy and his books? Any good? Anything better?