Image Image Image Image Image Image Image Image Image Image
Scroll to top

Top

New Tax Proposals Are Bad News For British Expats

New Tax Proposals Are Bad News For British Expats

happy elderly couple watching the sunset at the sea. Image shot 2013. Exact date unknown.Thousands of British expats could be forced to return to the UK if the British government presses ahead with plans to take back a personal allowance for those living abroad.

An official Treasury document reveals that the Government is looking at stopping expats who live abroad but claim personal allowance in the UK from being able to do so. While such measures could affect 400,000 British expats, the likelihood is that it is only those who live in countries with low tax rates who will suffer, as they may not be paying enough tax in the country where they live to offset their tax bill in the UK.

It is thought that, in extreme cases, being stripped of the personal allowance could lead to an additional tax bill as high as £4,000 for a couple living abroad.

The majority of the 1.2million British pensioners living abroad are unlikely to be affected because most state or private pensions are only taxable in the country of residence. However, the minority who  are only taxed in the UK could suffer a considerable increase to their tax bill.

Expats who still own a property in the UK and claim rental income from it, could also find themselves hit financially by the proposed changes.

Currently, the 175,000 Brits who live abroad but claim a rental income are allowed to earn £10,500 a year through renting without having to pay tax – or £21,000 for a couple. But the proposed changes would remove this tax break, leading to costs potentially running into the thousands for anyone not able to claim tax relief in the country in which they live.

http://www.halofinancial.com/BEAug14