Kiwipaul

Expats face £400 million tax raid
Expat couples could be £4,000 a year worse off under plans to strip non-residents of the personal tax allowance

Expats face £400 million tax raid - Telegraph

Expats who rent out their homes in Britain will be stripped of the right to use the personal allowance, under a tax raid prepared by George Osborne.

Britons could be forced to return from retirements overseas if the Chancellor presses ahead with plans to force non-residents to pay tax on all their UK income, accountants warned.

Retirees drawing a Government pension are also likely to be hit by the proposals, which could cut a couple’s income by up to £4,000 a year.

At present, EU nationals and British expats are entitled to offset income earned in the UK against the £10,000 personal allowance.

Mr Osborne first indicated his desire to curtail the allowance in the March budget.

Food for thought

Buzzy--Bee

This tax free allowance of course is of no benefit to Australian PRs or citizens as you have to pay tax on all your overseas income here. If you have paid tax on income in the UK then you can offset that tax against tax owed here, but if you haven't (ie it has come in under the £10,000 clip point) then you can't.

So the loss of this benefit will really only affect Temporary Australian residents I think. This includes New Zealand citizens here on TR444, which might be where you'll lose out KP?

BB

Bermudashorts

What BB said. I either pay tax here or there, not both and I don't care which.

JAJ

It's not a "tax raid" - it's a perfectly reasonable step that those who make economic gains from the United Kingdom pay tax to the United Kingdom.

As others have said, those who live in taxing jurisdictions should see little or no impact, due to foreign tax credits. Those who living in tax havens, or those who are not compliant with tax obligations where they live, will see a difference. Which, as far as the U.K. is concerned, is not a problem.

Scotty1

"However uk government pensions are only taxable in the uk, meaning that ....former civil servants and council workers living overseas will pay more tax"

A bit of inaccurate reporting from the Telegraph. The tax treatment of these pensions is no different to any other income!

Can't see this proposal making any difference to pr here.

JAJ

There are a few cases where the U.K. has sole taxing rights under a tax treaty. From the consultation paper, the current intention is to retain the right to a tax free allowance in these instances. Although that might change.

blackcab

This is such a non story. As previous psoters have stated, you have to pay the tax once anyway, whether here or in the UK. We looked into this as it might have had an effect on a family member, if she comes across to the dark side. As her only income is savings interest derived from a lump sum she was left as a very large inheritance some years ago. But it will not even have an effect on her. Basically you would have to have around three quarters of a milion pounds sitting in the bank earning a paltry 2% per annum in interest. Even then it would not effect you only any money above the three quarters of a million. Basically this will not be law until at the earliest April 5th 2015, but on this date the UK personal allowance for income derived from savings only rises to fifteen thousand pounds. So unluess you are solely relying on income from savings interest and recieving more than fifteen thousand pounds a year it will not effect you. How many people have three quarters of a million pounds sitting in a savings account earning two percent interest at fifteen grand a year, hands up? So really not a problem to the 99%?

louie

So those who live in the UK pay less tax (as they will remain entitled to a personal allowance) than those who live abroad on the very same income, whilst the latter don't use the NHS, libraries, have their bins collected or claim any benefits (possibly excepting state pension) etc. Doesn't sound very fair to me.

louie

I think you are missing the point. If your relative moved to Australia she would lose out big time if this goes through. Let's say her income - all UK sourced - is £10,000/A$18,000 (and let's assume tax rates are the same in both countries at 20%).

At the moment, she has no tax liability in the UK as the personal allowance is £10,000. Neither does she have a liability in Australia as her income is less than $18,200.

If this law is enacted, she would have to pay £2,000 in the UK as she would have no personal allowance if she has emigrated to Australia. She could not offset it against her non-existent Australian liability. So this would cost her £2,000.

It's all very well for people upthread to say it makes no difference to me because I pay tax, but there are probably quite a few pensioners in Australia and around the world managing on just a UK state pension and savings which produce little income, so having little liability to tax in the countries in which they are resident. If they live somewhere where there is a similar personal allowance to the UK, they would lose out substantially and they of course are the ones least able to afford it, which is why the article focusses partly on pensioners.

formula

Temporary migrants will lose the tax allowance too. They are bringing this in line with most other EU counties, US, Canada, Oz etc.

Non-residents will no longer be excluded from paying capital gains tax. I don't know why they ever were?

commonwealth

Lose Your Loose Change

Bermudashorts

Well we don't pay according to services used anyway.

Grayling

There is a double taxation agreement between the UK and Australia therefore you only have to pay tax in your country of residence.

All our income is UK sourced and we pay tax on the lot in Australia. We do not get any UK tax allowance as we are not UK tax payers therefore it will make no difference to us as pensioners living in Australia or to others who are Australian tax payers unless their income is from owning a UK property and renting it out (as I understand it).

Buzzy--Bee

Doesn't make a difference. Income is income.

BB

Grayling

Therefore they will not lose out as their income (and allowances) is taxed in Australia.

I thought that those who rented out UK properties could, or had to , declare the income to HMRC?....see post #1 on this thread