Expatriation

[expat]

OK - we were doing so well but now I'm confused again. Is there someone I can pay to sort it - some kind of specialised accountant I guess?

BTW I am British, but have been mostly abroad for last 10 years. I didn't mind being resident in UK as it has / had quite a favorable tax regime, but I expect big tax rises across the board before too long and a general drift to "Scandanavian socialism" so guess it might be time "officialise" it.

You are resident according to where you actually live. That can be more than one country, but usually is only one. You become non-resident in the UK quite easily, by becoming resident somewhere else. This you do by going to live there. Residence can change frequently, there is nothing odd about that.

Domicile is quite a different idea. As has been said, it is not necessarily where you are resident. It doesn't change just because you go and live and work somewhere else. Roughly speaking, it is where you intend to settle permanently; or where you or your parents were born if nothing else has changed your domicile away from that.

Income tax is normally paid according to a combination of:
1. place of residence,
2. place of earning the income.

The special point about domicile is that the above can be modified by it: specifically, if you are resident in the UK and earn in the UK but are not domiciled in the UK, you may not have to pay all the income tax to the UK that you would have to if you were domiciled here.

[TimberWolf]

Just because you are non-domiciled here (say you born in France or your father was) and you live here, does not mean you have to pay tax in France.

If you lived here, then you would not be resident in France and if your money was held outside of France (but not in the UK), then you would not pay tax on it anywhere.

A lot of people say/think "Well you've got to pay tax somewhere."

No you don't, many wealthy people (think friend of Phoney Blair http://en.wikipedia.org/wiki/Philip_Green) pay less tax than their cleaner.

You just need to clever accountants and tax advisers. Oh and bunging the Labour party a few quid now and then.

http://www.taxresearch.org.uk/Blog/2...tax-avoidance/

Funny how so many of these dodgy characters have been made Sir's or Lords. I see [Lord] Mandelson is in the news today for some boat trip with a rich Russian and a Tory.

Have they made B**** a Lord yet?

[DimPrawn]

That seems to me to be so, as you say. However, some would say that your example, of paying French taxes while using British public services, would not be the optimum arrangement

Just because you are non-domiciled here (say you born in France or your father was) and you live here, does not mean you have to pay tax in France.

If you lived here, then you would not be resident in France and if your money was held outside of France (but not in the UK), then you would not pay tax on it anywhere.

A lot of people say/think "Well you've got to pay tax somewhere."

No you don't, many wealthy people (think friend of Phoney Blair http://en.wikipedia.org/wiki/Philip_Green) pay less tax than their cleaner.

You just need to clever accountants and tax advisers. Oh and bunging the Labour party a few quid now and then.

http://www.taxresearch.org.uk/Blog/2...tax-avoidance/

[ace00]

OK - we were doing so well but now I'm confused again. Is there someone I can pay to sort it - some kind of specialised accountant I guess?

BTW I am British, but have been mostly abroad for last 10 years. I didn't mind being resident in UK as it has / had quite a favorable tax regime, but I expect big tax rises across the board before too long and a general drift to "Scandanavian socialism" so guess it might be time "officialise" it.

[expat]

I agree that if you born here (and your father was born here) the chances of getting a Non Dom status without hassle is remote.

But if you (or your father) were born outside the UK, you should be okay. And you can live and work here (especially if of European descent e.g French) no problem and use all the public services for free and have you income paid overseas.

Boomed!

That seems to me to be so, as you say. However, some would say that your example, of paying French taxes while using British public services, would not be the optimum arrangement

[DimPrawn]

I know that domicile and residence are 2 entirely different concepts, and are not in principle related. But my point was that if you are born in, say England of British parents, then you have a domicile of "England or Wales" until you acquire a new domicile. While it is theoretically possible for such a person to become domiciled abroad while remaining resident in the UK, it is unlikely to be easy to persuade HMRC of this. Mere declaration that you intend to escape to Cyprus one of these days is unlikely to do it.

Although it is not technically part of it, the Non-Dom status usually spoken of is intended for those who are not British, and this is being examined more closely now, eg a Non-Dom now has to declare on his SA form whether he has ever been domiciled in the UK, and state the date when he came to live in the UK. I very stronlgy suspenc that if you put down Yes, Since Birth, and "Non-Dom since a couple of months ago but still resident", another question or two will be needed before they accept that.

I agree that if you born here (and your father was born here) the chances of getting a Non Dom status without hassle is remote.

But if you (or your father) were born outside the UK, you should be okay. And you can live and work here (especially if of European descent e.g French) no problem and use all the public services for free and have you income paid overseas.

Boomed!

[expat]

Your domicile has nothing to do where you live, that's your residence.

London is chock full of non-doms that have lived in London for donkey's years and intend to live there for as long as they see fit (and as long as they are permitted to pay no tax on money held offshore).

You might be resident in the UK but domiciled abroad, pay tax on your UK wealth but not on assets, income and interest held offshore, which is fantastic if your receive your income into an offshore account.

Boomed!

I know that domicile and residence are 2 entirely different concepts, and are not in principle related. But my point was that if you are born in, say England of British parents, then you have a domicile of "England or Wales" until you acquire a new domicile. While it is theoretically possible for such a person to become domiciled abroad while remaining resident in the UK, it is unlikely to be easy to persuade HMRC of this. Mere declaration that you intend to escape to Cyprus one of these days is unlikely to do it.

Although it is not technically part of it, the Non-Dom status usually spoken of is intended for those who are not British, and this is being examined more closely now, eg a Non-Dom now has to declare on his SA form whether he has ever been domiciled in the UK, and state the date when he came to live in the UK. I very stronlgy suspenc that if you put down Yes, Since Birth, and "Non-Dom since a couple of months ago but still resident", another question or two will be needed before they accept that.

[Rantor]

Indeed.

You should not lightly change your domicile, mainly because you can not correctly change your domicile unless you are serious. Your domicile is, roughly speaking, where you intend to settle permanently. If there is no such place (i.e. no such intention) then you still have a domicile: most likely the one you were born with.

If you di change your domicile, that is saying in so many words that you intend not to stay in the UK, not to live or die there. If then you return a small number of years later, it might well be asked whether you had really changed your domicile before; it looks like you just changed your residence temporarily, with a view to possibly changing domicile later, possibly not.

Yes, it is their business; because it is a part of general law, not just tax law.

Edit: DP, the point is that the decision to change domicile is supposed to be permanent. If you change back 3 years later, they would have to ask whether you really meant it - because if you didn't, then you didn't have a right to non-dom status. Domicile is not as easy as residence, which can be ascertained easily and changed often.

BTW they are unlikely to accept that you are domiciled somewhere that you are not resident; and unlikely to accept that, unless you are paying taxes there. You can't just leave the UK and be liable nowhere. Unless you are rich.

I was living in Bermuda at the time and my uk accountant thought the non-dom stuff would make me immune to any interference from the IR. I was a mere boy, with no knowledge of such worldy matters and I quite liked the sound of it.

After moving back, I got a call one day from a guy in some department liasing between IR and the Home Office asking me to prove that I was entitled to reside in the UK This took quite some time to sort out and I got a number of full-on tax/vat inspections immediately after. To be avoided

[DimPrawn]

Your domicile has nothing to do where you live, that's your residence.

London is chock full of non-doms that have lived in London for donkey's years and intend to live there for as long as they see fit (and as long as they are permitted to pay no tax on money held offshore).

You might be resident in the UK but domiciled abroad, pay tax on your UK wealth but not on assets, income and interest held offshore, which is fantastic if your receive your income into an offshore account.

Boomed!

[expat]

Also, make sure you keep hold of their response acknowledging you as no longer ord resident.

Send a copy of this along with your last due tax return and also once before the next tax return would have been due.

Sounds like overkill, but they don't communicate that well internally and you can easily start racking up escalating penalty fines for not filing a return. You tend to find out when the person you lives in your old house gets in touch to whinge about HMRCs hired goons appearing at the door.

BTW - avoid the non-domiciled route as it is a pain if you ever want to move back. I had an accountant in the mid 90s who thought that would be a good stunt but I had all sorts of problems when I moved back in 98.

Indeed.

You should not lightly change your domicile, mainly because you can not correctly change your domicile unless you are serious. Your domicile is, roughly speaking, where you intend to settle permanently. If there is no such place (i.e. no such intention) then you still have a domicile: most likely the one you were born with.

If you di change your domicile, that is saying in so many words that you intend not to stay in the UK, not to live or die there. If then you return a small number of years later, it might well be asked whether you had really changed your domicile before; it looks like you just changed your residence temporarily, with a view to possibly changing domicile later, possibly not.

Yes, it is their business; because it is a part of general law, not just tax law.

Edit: DP, the point is that the decision to change domicile is supposed to be permanent. If you change back 3 years later, they would have to ask whether you really meant it - because if you didn't, then you didn't have a right to non-dom status. Domicile is not as easy as residence, which can be ascertained easily and changed often.

BTW they are unlikely to accept that you are domiciled somewhere that you are not resident; and unlikely to accept that, unless you are paying taxes there. You can't just leave the UK and be liable nowhere. Unless you are rich.

[DimPrawn]

Also, make sure you keep hold of their response acknowledging you as no longer ord resident.

Send a copy of this along with your last due tax return and also once before the next tax return would have been due.

Sounds like overkill, but they don't communicate that well internally and you can easily start racking up escalating penalty fines for not filing a return. You tend to find out when the person you lives in your old house gets in touch to whinge about HMRCs hired goons appearing at the door.

BTW - avoid the non-domiciled route as it is a pain if you ever want to move back. I had an accountant in the mid 90s who thought that would be a good stunt but I had all sorts of problems when I moved back in 98.

Why would being a non-dom be a pain?

You get everything someone domiciled gets without having to pay tax on anything offshore?

It's like the Holy Grail - Enjoy the fruits of others taxes and not pay any yourself.

[Rantor]

Thanks - that's just what I was looking for.

Also, make sure you keep hold of their response acknowledging you as no longer ord resident.

Send a copy of this along with your last due tax return and also once before the next tax return would have been due.

Sounds like overkill, but they don't communicate that well internally and you can easily start racking up escalating penalty fines for not filing a return. You tend to find out when the person you lives in your old house gets in touch to whinge about HMRCs hired goons appearing at the door.

BTW - avoid the non-domiciled route as it is a pain if you ever want to move back. I had an accountant in the mid 90s who thought that would be a good stunt but I had all sorts of problems when I moved back in 98.

[ace00]

Try their FAQ: http://www.hmrc.gov.uk/cnr/faqs_general.htm

Thanks - that's just what I was looking for.

[expat]

Anyone officially expatriated from the UK? I'm looking for information on how to do it but googling just brings up a bunch of rubbish.

If by that you mean having HMRC regard you as "Not Ordinarily Resident" in the UK, basically you write to them and tell them on a Form P85 what you are doing, and they write back and tell you that means you are Not Ordinarily Resident.

Try their FAQ: http://www.hmrc.gov.uk/cnr/faqs_general.htm

[ace00]

Anyone officially expatriated from the UK? I'm looking for information on how to do it but googling just brings up a bunch of rubbish.