Reply to: No tax for UK non-dimicile

[tim123]

So I would pay 43% (25% US + 18% UK) on any capital gains (that's ignoring the fact that I have already lost around 30% of any gain in corporation tax and inflation). On interest or dividends I would pay a simple 73% (33% US + 40% UK).

This sounds a touch unkind to investors. Is it just a polite way of kicking out all the foreigners?

No, The double taxation rules will apply.

This is actually the issue here.

For 70% of the people the new rule will affect, the extra amount that they will pay to HMG will be negligible, but they will have to do (or pay an accountant to do) one hell of a lot more form filling.

For 15% of the people it affects, 30,000 GBP is the small change that has fallen into their sofa.

So, only about 15% of the current non doms will pay the 30K and think that it matters.

tim

[hugebrain]

It will be every year. And No, it doesn't work like that, you don't have to be UK domiciled to pay UK tax.

HTH

tim

So I would pay 43% (25% US + 18% UK) on any capital gains (that's ignoring the fact that I have already lost around 30% of any gain in corporation tax and inflation). On interest or dividends I would pay a simple 73% (33% US + 40% UK).

This sounds a touch unkind to investors. Is it just a polite way of kicking out all the foreigners?

[tim123]

Is it a one-time payment or £30,000 per year?

Also, if you falsely describe yourself as UK domiciled to avoid the £25,000 charge, can you get jailed for perjury or fined or anything?

It will be every year. And No, it doesn't work like that, you don't have to be UK domiciled to pay UK tax.

HTH

tim

[hugebrain]

Are you clear on what "dimicile" is? (sic)

It's not related "resident for tax purposes"

It roughly boils down to where your parents were born, and where you expect to retire.

From next year if you declare yourself non-domicile you will be expected to pay £30,000 for the privilige. (search for the detail in the last pre budget report), or £25000, if the tories get in, which is not likely, given there isn't an election.

Is it a one-time payment or £30,000 per year?

Also, if you falsely describe yourself as UK domiciled to avoid the £25,000 charge, can you get jailed for perjury or fined or anything?

[ExecConsult]

It's not related "resident for tax purposes"

It roughly boils down to where your parents were born, and where you expect to retire.

From next year if you declare yourself non-domicile you will be expected to pay £30,000 for the privelage. (search for the detail in the last pre budget report), or £25000, if the tories get in, which is not likely, given there isn't an election.

Thanks Max. So if my parents were born outside the UK (which they are) and I don't expect to retire in the UK (which I don't), I can declare myself non-domicile, pay 30 K, which is less than 10 % of my full-year income (hence, much lower than 1 year of tax anyway). And off I go. Sounds like a winner.

Please, where can I get the last budget report, and please, who do I speak with to start moving this forward?

[max]

Hello everybody. I just joined - this board looks very resourceful and full of members with great knowledge about the world of contracting.

I have just moved back to the UK after a year in Europe, do not have a UK passport and am at the moment working on a contract in Germany. My permanent address is in London, and I have a limited registered in England.

I have heard that there are about 110 000 contractors in the UK who claim they are UK non-dimicile and hence, do not pay any tax at all.

I don't like sailing close to the wind, but if I can get away with lower tax without breaking any laws, I am all ears.

Can anyone shed some light on low/no tax for non-dimicile UK contractors please?

Thanks.

Are you clear on what "dimicile" is? (sic)

It's not related "resident for tax purposes"

It roughly boils down to where your parents were born, and where you expect to retire.

From next year if you declare yourself non-domicile you will be expected to pay £30,000 for the privelage. (search for the detail in the last pre budget report), or £25000, if the tories get in, which is not likely, given there isn't an election.

[tim123]

That maybe the case with Siemens but mostly it isn't a problem, I never experienced any problems. You can talk to the agency. The difference between being employed and freelance is huge, so I wouldn't touch a contract which forced me to be "employed".

In engineering, I'm getting little choice but to accept whatever job I am offered. Some of us don't have the luxury of turning something down because the payment terms aren't ideal.

tim

[tim123]

I am taxing in the UK because that's where I have my 'management and control'

You may like to think that. I strongly suspect that you are wrong.

If you spend, lets say, 45 weeks times 4 days, equals 180 days, earning the fees of your company in Germany, they will argue (probably sucessfully) that the management and control of your company is in Germany. You don't move the management and control back to the UK because that's where you write out your invoice, it follows you to where you are sitting when the fees are earnt.

HTH

tim

[2uk]

I know a contractor who is paying tax off-shore. He is employed with a management company at that shore. He’s been here for over 2 years , but he is not English.

[BlasterBates]

Because not all employers will let you "freiberuflich".

It's like the UK, you can't just decide to be self employed, you have to be working in a manner which IS self employed. Admittedly the tests for self employment in Germany are easier to pass than in the UK, but you still need a willing employer to pass them. And for some employers (like a very large electronics company beginning with S) being willing is too hard for them.

tim

That maybe the case with Siemens but mostly it isn't a problem, I never experienced any problems. You can talk to the agency. The difference between being employed and freelance is huge, so I wouldn't touch a contract which forced me to be "employed".

[ExecConsult]

It's hardly likely to be otherwise, is it.

There's no point p1ssing around trying to change your domicile to save a couple of grand in tax, is there?

tim

It's high end consultancy, so shaving off 10% would save me 20 K pounds a year. If I can save that legally, I will go for it.

I am taxing in the UK because that's where I have my 'management and control' - this gives me a tax benefit over Germany, as in the UK, I can go for the low salary, high dividends approach outside the IR 35.

I am also providing consultants through my ltd, sourced from the open market in England, and provided to customers around the world.

Also, I am travelling so much that I contemplate giving up my rented accomodation in the UK in favour of staying in hotels. This should strengthen my case for non-domicile, I assume?

So an expert in non-domicile is the way to go. Does anyone know an expert like that I can contact?

[tim123]

Experts in non-domicile matters are expensive and many deal with you only if you are worth millions in cash/investments.

It's hardly likely to be otherwise, is it.

There's no point p1ssing around trying to change your domicile to save a couple of grand in tax, is there?

tim

[sathyaram_s]

Get in touch with people from your country of origin who are non-domiciled in the UK. They should be able to guide you and refer you to a professional. As far as I understand, it is important to consider the tax rules of your country of domicile as well to ensure you can reduce your tax bill both efficiently and legally

Experts in non-domicile matters are expensive and many deal with you only if you are worth millions in cash/investments.

Hello everybody. I just joined - this board looks very resourceful and full of members with great knowledge about the world of contracting.

I have just moved back to the UK after a year in Europe, do not have a UK passport and am at the moment working on a contract in Germany. My permanent address is in London, and I have a limited registered in England.

I have heard that there are about 110 000 contractors in the UK who claim they are UK non-dimicile and hence, do not pay any tax at all.

I don't like sailing close to the wind, but if I can get away with lower tax without breaking any laws, I am all ears.

Can anyone shed some light on low/no tax for non-dimicile UK contractors please?

Thanks.

[AlfredJPruffock]

Hello everybody. I just joined - this board looks very resourceful and full of members with great knowledge about the world of contracting.

I have just moved back to the UK after a year in Europe, do not have a UK passport and am at the moment working on a contract in Germany. My permanent address is in London, and I have a limited registered in England.

I have heard that there are about 110 000 contractors in the UK who claim they are UK non-dimicile and hence, do not pay any tax at all.

I don't like sailing close to the wind, but if I can get away with lower tax without breaking any laws, I am all ears.

Can anyone shed some light on low/no tax for non-dimicile UK contractors please?

Thanks.

You should take advice from a qualified accountant - defining your status as to non-domiciled, non-residency can be quite complex - my understanding is that non-domiciled depends on a range of factors - however if you have property in the UK - that can be a pointer to being domiciled in the UK - however depending on how long you have been away from the UK is an important factor for non-residency - there is an interesting publication from HRMC on this topic which you can obtain from their website - again I would seek professional advice from an overseas Tax Specialist on such a matter.

[tim123]

You can't just syphon money off as overspill, if you're going to that you may as well go the whole hog and evade tax completely. If you have an employee taxed in Germany, the Ltd company will also have to be registered, and therefore any "overspill" will be taxed at corporation tax rates. I recommend you work "freiberuflich" (freelancer). All income is taxed as personal income. You'll need to declare this in the UK but it won't be taxable. I can't see how a managed company in Germany is beneficial .

Because not all employers will let you "freiberuflich".

It's like the UK, you can't just decide to be self employed, you have to be working in a manner which IS self employed. Admittedly the tests for self employment in Germany are easier to pass than in the UK, but you still need a willing employer to pass them. And for some employers (like a very large electronics company beginning with S) being willing is too hard for them.

tim