Ex Pat stuff

[AtomKraft]

Folks.

I know the rules have changed, and I've read some of the HMRC stuff, but it is SO boring- and frankly HARD to understand.

If I, a married guy, with kids and a house in the UK , stay out of the UK for 90 days or less, can I still be UK tax exempt?

I realise it's a bit of a cheek asking this on pprune.:uhoh:

Plan to work in India-, if that's any help, and will be paid about $14000 US, leaving about $10000 US Nett.

Sick of UK tax! ;)

[binsleepen]

Short answer - no.

Pretty much everything about you has to leave. Wife, kids, house, schools etc.

Long answer much more involved and you will have to read the HMRC bumf.

regards

[AtomKraft]

Thanks for your short answer.

I'd heard it had changed.

Next question:

How best to avoid UK tax?
My idea is to open an Indian bank a/c, and paythe loot in there as a first step.

Second step might be pay all bills from there.

Third step....? not so sure.:uhoh:

Pushing my luck here, I know....:ooh:

[Crashlanding]

Best way to avoid UK tax, dont reside in UK.

Anything else, suggest speaking to an accountant first, might be able to do some bits off island, but being honest if your caught doing something deemed to be illegal to avoid tax then you might find you get some free accommodation and food courtesy of the UK Govt

[AtomKraft]

Crashlanding: Wouldn't be the first time...., jail-wise, although in the Army, it was easy to be a short-term criminal....;)

Cards on table: Just sick of UK PAYE. I'd prefer to be a bit more like my self employed (not-a-pilot) mate.

I'm 'sick' of getting :mad: by HMG and if I go overseas, there's NO way that those HMG parasites are going to get a drink out of me. :)

[DooblerChina]

You've gotta move abroad mate, a mate if mine lives in Belgium and commutes. His overall tax rate is comical, something like 0.2%. He can claim all sorts against his Belgium tax including commuting expenses and his mortgage interest.

Anyway, that's an aside, then other guys are right, gotta move abroad to live tax free... and rightly so IMO

[AtomKraft]

Dooble.

Sure!

I AM going abroad.

Just the wife, kids, and debt staying in the UK! ;)

Gawdelpus.....:)

[silverhawk]

The tax you pay in India together with the Form 16 from you're employer should mean no further liability to HMRC.

[deltahotel]

If you still have property in the UK for your use, you will find this a very difficult trick to work. Suggest a good adviser. Many of my colleagues (and I in the past) use David Sawyer. www.aircrewtaxreturn.co.uk Hope the mods let this through as advice rather than advertising!!

[Al Murdoch]

I recommend seeing a tax advisor to determine your status.
However, broadly speaking, there are two levels of "connection" to the UK which determine the number of days you may spend in the country. A day equates to a midnight spent on UK soil. So if you arrive at 1400 one day and leave at 1400 the next day, that is 2 days.
If you are found to still be connected to the UK and if you have a house, wife and kids in school, and I would GUESS that you would be, then you are allowed 45 days.
If you had a house that is not rented out and you just go back there occasionally, then you could spend 90 days in the UK.
The test is to determine how much of the public services you are using and therefore whether you should be paying tax or not.
This is a difficult area as none of the new rules (to to my knowledge) have been tested legally. Naturally they make it difficult for the little people who can't afford elaborate tax avoidance scams - the lives of the Russian oligarchs will remain unchanged.
See an advisor.

[Ancient Observer]

You and your family need to go abroad to avoid UK taxes.
It helps to have let your house out, and have the foreign based employer tell HMRC that you are now employed abroad.
HMRC have seen all the lesser variations, and are clamping down if they think that you and yours are still, really here.

You might need to get a divorce if your family stay here, but I'm not sure that even that will work.....

[AtomKraft]

Thanks Al.

Surely 1400 to 1400 is only one midnight?

Yes, I shall have to seek expert advice on this one.

I was (and still am!) hoping to hear from some 'real life' ex pats with real time, experience-today-based first hand reality sharing information!

Might be useful for folk other than me also. :ok:

Ancient
My family are staying home, my house will not be rented out. These are not negotiable in my case.
Two kids, age 19 & 17.5
Apparently these ages are relevant.

[737 Jockey]

With all due respect, if your wife and kids are living in the UK and they are using the health care system etc. , then why would you not expect to pay tax in the UK? :ugh:

Good luck all the same, cos we all hate the tax man! :ok:

[doniedarko]

With all due respect, if your wife and kids are living in the UK and they are using the health care system etc. , then why would you not expect to pay tax in the UK?

Good luck all the same, cos we all hate the tax man!

Yeah ..think Amazon, Apple, Starbucks....what was it Leona Helmsley said about taxes and little people ....

[AtomKraft]

737

Because I will be paying tax in India!

I know some ex-pats are operating completely tax free, but in my case I'm only seeking to avoid HMG adding their cut to that which the Indians have already extracted.

India tax is about 28%

UK tax is what, 50%? So HMRC might ask for another 22%. :mad:

Dem's not getting it! ;)

[bucket_and_spade]

Dual Tax Agreement. There will be one with India - details on the HMRC website.

[AtomKraft]

Dual tax (or Double taxation) agreement.

Oh yes.

So if you were due to pay 50% tax in the UK, but you only paid say, 30% abroad- UK HMRC helps itself to another 20%.

:sad:

[WhyByFlier]

http://www.hmrc.gov.uk/taxtreaties/in-force/india-dtc.pdf

Scroll down to section 8 and click on the link to it and it'll take you there.

Section 8 of the India - Uk tax agreement:

Profits derived from the operation of aircraft in international traffic by an enterprise of one of the Contracting States shall not be taxed in the other Contracting State.


There's this updated amendment to the treaty but it is not in force and doesn't affect air transport workers.

http://www.hmrc.gov.uk/taxtreaties/signed/uk-india-dta.pdf

Enjoy India.

[sarah737]

Not at all Ak, you have to read the DTA. Sometimes it is a tax credit and some times an exemption. The one with India states that the Indians may tax you, so you should be safe, but, by all means, do consult a professional.

Why by, you have to look at the section 16 about income derived from employment aboard an aicraft, you are looking at where airlines have to pay their taks.

[sarah737]

You've gotta move abroad mate, a mate if mine lives in Belgium and commutes. His overall tax rate is comical, something like 0.2%. He can claim all sorts against his Belgium tax including commuting expenses and his mortgage interest.
In fact Belgium has one of the highest tax rates in the world (50%) Even after all possible deductions. Your friend benefits from a favorable double tax treaty, which doesn't allow Belgium to tax him altough he lives there. The Belgian-UK treaty has recently been changed because the old one lead to double non-taxation for pilots living in Belgium (UK) and working for a UK (Belgian) company.

[captplaystation]

That'll be the JetAir Fly contract screwed then . . . . . . .

[de facto]

The question you should ask yourself is :why stinky India?:p

[kick the tires]

Because I will be paying tax in India!

Errr, and your wife and kids and you on occasion will be using the services paid for by the UK GOV.

Who pays for those if you are so blatantly avoiding tax?? Oh, we do!

If you dont like it, bugger off, wife kids and all!

[springbok449]

I used to work for a UK company and commuted from Belgium. I paid no tax in UK and very little in Belgium...
From the UK side of things I had to spend less than 90 days in the UK, at the time they didn't count the day that you commuted from Belgium and then flew off out of the UK as a day in UK as long as it all happened on the same day but that did change...

The rules from UK tax are quite specific and your family living in the UK is one of them (which is normal as someone said they will be using UK privileges so you have to pay for them...) although I don't know the agreements with India.
They even check things like Supermarket loyalty cards to make sure you're not in UK more than 90 days etc or when you say you are in India.

I had to keep prove of commuting, tickets, boarding cards etc in case I got checked which I didn't but know some that have.

Your best bet is to contact a company like MannTax in Onchan Isle Of Man they will be able to put you straight. (They specialise in Aircrew tax affairs amongst other things)

Good luck

[WASALOADIE]

Springbok,

Bu115hit regarding the checking of supermarket loyalty cards etc! My daughters continue to use mine in the UK.

yes you should keep flight ticket receipts or stubs but what does it prove if you omit a stub? Nothing. They have the ability to check your passport details and entry exit through immigration.

A certain amount of the procedure is based on honesty, if HMRC think you are now being honest, they will investigate but also ask you to prove you were resident outside of the country for the period claimed. It will be up to the individual to prove it otherwise HMRC can interpolate what they think is the period you were in/out of the country.

As for family staying in the country, it doesn't matter. I am in the Middle East with my wife, my daughters remain in the UK and are tax payers in their own right. I pay no UK tax at the moment. What I do pay will be calculated when I return to the UK.

Advice regarding talking to HMRC is good, I did and they were more than willing to tell me what and what I couldn't do. Sent me all the information and a P85, send me regular letters to my address here (another way of checking you are still there).

My advice, talk to the tax man direct, don't lie because he will hammer you if you get caught out. PPRUNE is a rumour network and there is a lot of bad advice given on here, talk to the professionals!

[slowjet]

John, kids are probably at school. Wifey , probably, does not work but bombs around the shops in expat's Porche until he comes home on his days off. Key here, I believe, is the term "Residence available for use". Could apply to your Mum's upstairs attic. Look, play the game but if you know that you are foul of the law, please don't boast. Whole bunch of guys fled offshore one time. Wifey & kids & home remained here. The pilots worked a deal with their Rostering (I mean Lostering) so that it looked like they were Based abroad. Effectively, they began & ended the roster pattern in the UK enjoying lengthy days off in the UK. One boasted that he spent more time in the UK than his neighbour (also aB747 pilot) who was employed by BA ! Careful, HMRC are on the trail.

[SADDLER]

That's it lads, post everything on a website for all and sundry to read.

[PT6Driver]

Seek specialist advice, but broadly it dependes on the number of ties you have to the UK.
A house you can use would be one, wife kids another (divorced slightly diferent), number of days you work in UK and number of days spent in UK over the last 2 complete tax years.

Given the original posts conditions in order to be classed as non resident for tax purposes you would have to spend less than 45 days in UK, not work here at all but still have wife kids and house in UK. (as far as I have been made aware) The next year it would be 45 and finally in the 3rd complete year you could go to 90. This is how things stood a month or so ago but the situation is fluid so seek specialist advice for the uptodate version.
(CAUTION this is from information recieved and does not constitute legal or tax advice)

The note about what constitutes a day means that arrive 23:59 on the 1st and leave 11:59 on the 2nd would count as 2 days. So plan very carefully your trips back home.

[AtomKraft]

Kick the Tyres.

My wife and older kid (19) are both taxpayers. The Younger daughter is at school (17.5 yrs). So they are paying their own way. I'm not some sort of benefit scrounger, you know. I've paid a bloody fortune in UK tax in the 36 years I've been working.

It sounds to me like I meet 'test three': Full time overseas, zero work in the UK. therefore allowed not more than 90 days 'in country'.

Now, if I could just get out of paying the Indian tax- that would be splendid! ;)

[Enecosse]

On leaving UK submit P85 form. If you are on a full time contract, stay out of the country (UK) I.e don't visit for more than 90 days a year and you don't work in the UK more than 20 days a year then you will be deemed offshore for tax purposes.
Break any of the above and you the will be assessed on such things as wife, kids, schools, golf club to determine tax status.
Any tax due will depend on tax treaty with country of employment and how much tax you pay there which could include any your employer pays on your behalf.
Any income (rental) generated in the UK will need to be declared and maybe liable to tax.

You need to stay out the country for a full tax year, so go for 3 months decide you don't like it then you will need to pay tax on earnings.

The above is my understanding and maybe complete bollocks, as has been suggested if you are really concerned seek expert advice.

Before returning onshore at some point in the future such matters as crystallising any capital gains liability generated by the offshore earnings needs to be considered. Again ask an expert.

[AtomKraft]

Thanks Enecosse, that tallies with other adviceI've had.

Armed with a slightly better idea of the 'lie of the land' than I had originally, I shall now approach HMRC.

:ok:

[Facelookbovvered]

The tax situation of overseas workers is not really about the provision of services to a wife or husband that you have left behind in the UK it about whether you are actually non resident for tax purposes and the general points above are broadly correct, clearly if you as a single person decide to go and live and work in Canada or Australia and severe all meaningful ties with the UK then your tax liability for earnings overseas is none of HMRC business and yes you can still come back to visit family and friends subject to the number of days that you stay.

But and it's a big but that's not what we're talking about here is it? and the revenue know it!

What were talking about here is pilots with no UK job options who have taken up employment with non UK airlines from the sandpit to FR who appear to work overseas, but in reality do not meet the very strict tests awaiting royal accent by HMRC and there are hundreds of them if not a 1000+ plus, who earn their crust overseas but pay no tax on their earnings, either because they are working in Dubai or they are sort of self employed or have not registered with the tax authority and are paid gross.

So if you work for EK or Eithad and pay no tax, but live in the sand pit with your wife/girlfriend/boyfriend then you have nothing to fear from HMRC, but if you work in the above, but get home when you can to a home that you own and have unfettered access then the view of HMRC is that you have not severed your ties with the UK and YOU WILL BE LIABLE FOR TAX, if you work in another country, normally but not exclusively within the EU then if you can demonstrate that you have paid tax in that country then you may not have any tax liability in the UK

So in simple terms if you are not paying tax on your income but are connected to the UK through wifey property kids then " you be f**ked"

Remember your electronic finger print is everywhere, just have a look at your credit card statement, your mobile phone bill,Facebook page, ( just seen a mate tonight on Facebook " at xxx airport business lounge, home to see girlfriend & daughter for 10 days, can't wait" ) so if you think your clever, then budget on €50k a year in fines, penalties and interest, then you covered

[wiggy]

I was (and still am!) hoping to hear from some 'real life' ex pats with real time, experience-today-based first hand reality sharing information!

...And the answer is what facelookbovvered said, but good luck with your efforts.

[Enecosse]

"So in simple terms if you are not paying tax on your income but are connected to the UK through wifey property kids then " you be f**ked" "

This is incorrect as long as you pass the residency test. The part of which is of interest to pilots is, full time contract, 91 days or less a year in UK and less than 20 days work in UK.
With HMCR the onus of proof is on the individual so if you think that you can ignore the above and not pay tax you may or may not get away with it, however if HMCR decide to audit you have cash on hand.
There is a wealth of information about this out there, including an explanation of why the rules have changed.


Hope this helps.