A Question of Tax
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A Question of Tax
Ladies & Gents,
I am a UK 40% tax payer and possibly have the opportunity of doing a little work on contract over next winter. The problem is although the proposed gross salaries are great, when you take off the 40% etc, it soon becomes unfeasible.
Having said this, it has been suggested to me that an offshore account should be opened as the monies paid into there would only be subject to 15% or so tax. Seems to be too good to be true as I wonder how I can then get the money out of the Isle of Man to pay my mortgage, Wife's shoe bill etc without encountering any more tax.
Of course I can go to an accountant and probably will in the near future, but I am wondering if there has been a UK citizen in the recent past who has done contract work over the winter and who has also come up with any interesting tax scenarios? Legal of course!! I should say I have no interest at the moment of becoming an ex pat and hence non uk tax payer. This would be a few months work over the winter only.
I am a UK 40% tax payer and possibly have the opportunity of doing a little work on contract over next winter. The problem is although the proposed gross salaries are great, when you take off the 40% etc, it soon becomes unfeasible.
Having said this, it has been suggested to me that an offshore account should be opened as the monies paid into there would only be subject to 15% or so tax. Seems to be too good to be true as I wonder how I can then get the money out of the Isle of Man to pay my mortgage, Wife's shoe bill etc without encountering any more tax.
Of course I can go to an accountant and probably will in the near future, but I am wondering if there has been a UK citizen in the recent past who has done contract work over the winter and who has also come up with any interesting tax scenarios? Legal of course!! I should say I have no interest at the moment of becoming an ex pat and hence non uk tax payer. This would be a few months work over the winter only.
Bellwether&cloudbuster
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Offshoring.
Hi,
It is all to do with where you are domiciled as in live, nothing to do with where you have your accounts.
Income arising in the United Kingdom is liable to UK income tax even though the recipient may be not resident in the UK, unless the income can be exempted or partially relieved under a Double Taxation Treaty.
If you are resident in the UK, you will normally pay UK tax on all your earned income, wherever it arises.
Where you are a member of an aircraft crew, inland revenue normally treat your duties as performed in the UK if
J
It is all to do with where you are domiciled as in live, nothing to do with where you have your accounts.
Income arising in the United Kingdom is liable to UK income tax even though the recipient may be not resident in the UK, unless the income can be exempted or partially relieved under a Double Taxation Treaty.
If you are resident in the UK, you will normally pay UK tax on all your earned income, wherever it arises.
Where you are a member of an aircraft crew, inland revenue normally treat your duties as performed in the UK if
- the voyage or flight does not extend to a place outside the UK, or
- you are resident in the UK and the voyage or flight begins or ends in the UK, or
- you are resident in the UK and embarked on part of a voyage or flight which begins or ends in the UK.
J
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tax
westie, my 2penneth:
3 definitions in uk tax, domicile (difficult to change, basically fathers birthplace) ordinarily resident (place where you spend average of more than 90 midnights in 4years(184 in first year)) and residence (place where you actually live.
you cant change domicile, you arnt going out for more than a few months and you will remain resident/ordinarily resident, so i dont see how you can get past it. All income will come in under gordons beady little eye and you must declare it otherwise its illegal.
You could i believe, get paid into an offshore company account (700pounds on intrnet) then only monies returned to you personally will come in under the tax net. So you could possible have the company pay for your next holiday etc however strictly speaking this would be benifit in kind, but as no money reaches uk shores there would be no way of chasing it. My theory is dont S**t on your doorstep though, so i would suggest no.
Getting paid in another currency(euro for exampl) will allow you to get a euro mortgage offshore on your onshore property save 1.5percent min on uk property and keep monies offshore as mortgage fund.Most offshore banks allow companies to pay mortgages etc. Again it depends on how complex you want to go.
thats how i see it, although please get proffesional advice before acting
regards
3 definitions in uk tax, domicile (difficult to change, basically fathers birthplace) ordinarily resident (place where you spend average of more than 90 midnights in 4years(184 in first year)) and residence (place where you actually live.
you cant change domicile, you arnt going out for more than a few months and you will remain resident/ordinarily resident, so i dont see how you can get past it. All income will come in under gordons beady little eye and you must declare it otherwise its illegal.
You could i believe, get paid into an offshore company account (700pounds on intrnet) then only monies returned to you personally will come in under the tax net. So you could possible have the company pay for your next holiday etc however strictly speaking this would be benifit in kind, but as no money reaches uk shores there would be no way of chasing it. My theory is dont S**t on your doorstep though, so i would suggest no.
Getting paid in another currency(euro for exampl) will allow you to get a euro mortgage offshore on your onshore property save 1.5percent min on uk property and keep monies offshore as mortgage fund.Most offshore banks allow companies to pay mortgages etc. Again it depends on how complex you want to go.
thats how i see it, although please get proffesional advice before acting
regards
Last edited by tephlon-don; 10th Apr 2007 at 09:13. Reason: afterthought
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Guys
You need to get proper professional advice from someone experienced in this field. It is so easy for the slightest little thing to trip you up.
You need to be out of UK for signficant period of time.
Find a good accountant with experience.
You need to get proper professional advice from someone experienced in this field. It is so easy for the slightest little thing to trip you up.
You need to be out of UK for signficant period of time.
Find a good accountant with experience.
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Yes Guern thats what i intend to do but was interested in the experiences of other pilots who might have done what I am looking at. i.e. maybe a 3 month short term contract abroad in the winter.
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Start a company!
have a look at the self employed option and start a small business - eg: you and spouce. It is possible to just pay company tax and your better half can draw a salary at reduced tax rate if they are on lower rate. there are National Insurance issues but not too difficult with a decent accountant. you you choose to go Ltd and VAT registered there are further gains but more regular paperwork.
Lots of UK jet captains work this way rather than PAYE.
Lots of UK jet captains work this way rather than PAYE.
