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Tax residency in the British Virgin Islands

Tax residency in the British Virgin Islands

Old Sep 30th 2020, 2:45 am
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Default Tax residency in the British Virgin Islands

Can anyone tell me if it's relatively easy to get tax residency in the BVI? I read somewhere that you get it automatically after 3 months stay (and yes, I know you have to request to stay etc). I read somewhere else that it was 6 months, which may be a problem since non-belongers can only stay 6 months a year I believe.

There is nothing nefarious about this, it's just that if I don't have a tax residency, my existing country of Australia may feel entitled to claim my tax residency in Australia and demand taxes on foreign income (they have done this to people). I've looked about, and the BVI seems the most attractive zero-tax place to me for several reasons.
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Old Oct 6th 2020, 7:29 pm
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Default Re: Tax residency in the British Virgin Islands

Lol it doesn’t work that way. Nice idea, I fancy Monaco, think i’ll be taxed there next year, the country I live in will understand.

There are 2 unrelated sets of questions- does Australian law say you are resident for tax purposes and does the BVI claim you are resident for tax purposes. Then if both do, what treaties if any prevent double taxation of income. It is NEVER based on your wishes, it’s based on facts about your location and actions.

It is companies that normally claim tax residency based on relevant sets of laws and how they manipulate monies. Of course you can own a company if it is advantageous. For mere mortals it is determined by claiming countries laws relating to tax residency.

Last edited by uk_grenada; Oct 6th 2020 at 7:32 pm.
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Old Oct 6th 2020, 8:22 pm
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Default Re: Tax residency in the British Virgin Islands

Originally Posted by uk_grenada View Post
Lol it doesn’t work that way. Nice idea, I fancy Monaco, think i’ll be taxed there next year, the country I live in will understand.

There are 2 unrelated sets of questions- does Australian law say you are resident for tax purposes and does the BVI claim you are resident for tax purposes. Then if both do, what treaties if any prevent double taxation of income. It is NEVER based on your wishes, it’s based on facts about your location and actions.

It is companies that normally claim tax residency based on relevant sets of laws and how they manipulate monies. Of course you can own a company if it is advantageous. For mere mortals it is determined by claiming countries laws relating to tax residency.
I'm not sure why you think it doesn't work like that. Most countries have rules for tax residency.

For example, as a UK citizen, I moved to Australia. As soon as I had been there for 6 months, I was resident for tax purposes. As soon as I had been out of the UK for 9 months (I recall?) I was no longer a uk resident for tax purposes.

I'm considering buying or building a house in the BVI, if I can get tax residency with my permit to reside there (for up to 6 months a year) as a property owner. And yes, I know the 10% stamp duty on purchases, and 1.5% tax on expected rental income too.

I know that companies do this, and there is is a lot of information about that. There is much less on individuals, which is why I'm asking here. If you have any information, instead of just saying it's not like that, I'd be interested.

I definitely looked at Monaco, somewhere I've been several times and would be more convenient for me. Unfortunately it's hellishly crowded, and they want a lot of money in return for residency.
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Old Oct 6th 2020, 8:59 pm
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Default Re: Tax residency in the British Virgin Islands

You want to live in a place where there are no taxes ? Good luck with that !
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Old Oct 6th 2020, 9:20 pm
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Default Re: Tax residency in the British Virgin Islands

Originally Posted by scot47 View Post
You want to live in a place where there are no taxes ? Good luck with that !
Yes, I do.

Thanks!
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Old Oct 6th 2020, 9:21 pm
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Default Re: Tax residency in the British Virgin Islands

Originally Posted by Zig Zag Wanderer View Post
I'm not sure why you think it doesn't work like that. .....
Well it does, but only if you can manipulate your living arrangements to fit around thr tax rules. Which really means, unless you're happy spening most of your time living in whatever tax haven you choose, becoming a nomad, dividing your life between at least two homes with a fair bit of travel to ensure that you don't trigger the "six months rule" in a country you don't intend to pay taxes in. Even most of the ultra-rich have apparently decided that it is just easier to put down roots and swallow the tax bill, then be perpetually on the move to keep ahead of the tax man.

In your case it will, presumably mean leaving Oz for long enough to get out of the grip of the tax man there, and then never return for more than six months. BTW, in some countries, such as the UK, you also need to sell your home, as even a momentary return can immediately trigger renewed residency if you have a home there.
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Old Oct 6th 2020, 10:08 pm
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Default Re: Tax residency in the British Virgin Islands

Originally Posted by Pulaski View Post
Well it does, but only if you can manipulate your living arrangements to fit around thr tax rules. Which really means, unless you're happy spening most of your time living in whatever tax haven you choose, becoming a nomad, dividing your life between at least two homes with a fair bit of travel to ensure that you don't trigger the "six months rule" in a country you don't intend to pay taxes in. Even most of the ultra-rich have apparently decided that it is just easier to put down roots and swallow the tax bill, then be perpetually on the move to keep ahead of the tax man.

In your case it will, presumably mean leaving Oz for long enough to get out of the grip of the tax man there, and then never return for more than six months. BTW, in some countries, such as the UK, you also need to sell your home, as even a momentary return can immediately trigger renewed residency if you have a home there.
Yes.

I'm already travelling a lot, in my retirement I'll be travelling all the time. Nothing to manipulate, I'm living just the way you described already. Its actually how I prefer to live.

Which is why I'm asking the Original question.
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Old Oct 7th 2020, 9:01 am
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Default Re: Tax residency in the British Virgin Islands

Originally Posted by scot47 View Post
You want to live in a place where there are no taxes ? Good luck with that !
There are plenty of places with no taxes (VAT aside), particularly in the Caribbean. All you have to do is either have the money in order to afford a home (e.g. Bermuda) or be prepared to go off island for a day after each year, until you gain full residency.

Of course there are some who might want to tax you on your world income once you are permanent resident BUT unless you actually have income generated on-island they typically don't want to know.

I've been in Grenada for over six months so deemed tax resident but when I went to the Inland Revenue to register they basically told me to go away as I had no local source income.

There is no tax on offshore investment income and capital gains. In fact it is possible on certain islands to set up an international company, as a local, to shelter your on-island investment property from tax, so long as you only let the property out to off-islanders.

As to the OP, you will not be tax resident in the tax year after you have left the UK and can split the year of leaving so long as you don't return after you have left (subject to a small allowance) if you do not keep a home there or have any other ties there. There are rules regarding CGT if you return within five full tax years. The key is that you must set-up shop somewhere else (clearly defined) within six months of leaving the UK in order to get split income treatment. That somewhere else does not have to be a taxed domicile.

GUERNSEY has tax residency after just three months but then it has income tax, low though it is,

For BVI, it is indeed SIX months.

Indeed I had intentions of being a fiscal nomad for a while, until the UK gets a decent government and one that can withstand the media poisoning of public opinion, spending up to six months in total in Portugal and France* in any year (post Brexit) with 90 days in Morocco (Atlantic Coast) and the balance in the Caribbean (due to family ties) but Covid has done that plan in.

I've decided that I need a proper base and there is really not enough to do here in Grenada to sustain me, lovely though it is (wife has a St Lucia passport which could be renewed to allow us to stay permanently). That's why I put in the variety of travel experiences to properly sustain things.

I guess what I'm saying is that it can't end up being some sort of construct that at the end of the day is dictated to be the fact that one is avoiding tax to justify it all.

I have looked hard at residence in Portugal and it is crunch time right now with December 31st looming but couldn't handle the thought of the tax administration in spite of the ten-year concessions on pension income. However, Portugal is worth a good look IF you can handle the language, which I can't really hence also the flip-flop. Morocco is easier with French.

I will say that for me, the effort involved in tracking, reporting and supporting (with uploads) my income (which was modest let's say) for UK tax purposes has become a royal pain in my older age.

*You cannot spend more time in France than anywhere else in a tax year and be non resident for tax

Last edited by Pistolpete2; Oct 7th 2020 at 10:09 am. Reason: I guess what I'm saying is that it can't end up being some sort of construct that at the end of the day is dictated to be the
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Old Oct 7th 2020, 9:57 am
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Default Re: Tax residency in the British Virgin Islands

One other factor is of course cost of living. Aside from vat, many caribbean islands have a nice source of income in import duties and foreigner additional taxes. You have noticed the propertŷ buying [and selling] taxes, be ready for 50% duty on everything and up to 150% on some things like vehicles. Some things that are insignificant like various insurances on health property and vehicles become significant on some islands too. Incidentally, many also dont have inheritance taxes.
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Old Oct 15th 2020, 3:07 pm
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Default Re: Tax residency in the British Virgin Islands

This thread deserves a lot more attention than the miserly amount it's received so far! Yours was a fair question, Zigzag, and you have some very useful comments to think about. uk_grenada reminded everybody that there's really no place on earth that is totally tax-free. Cayman - my home for the past 42 years - has no tax on incomes or company profits, but there are plenty of other taxes imposed by our spendthrift politicians! We too have property-transfer taxes (7 1/2%), motor vehicles (27%), and almost all other imports (22%), and there is a compulsory pension contribution of 10% of wages - fully payable for the self-employed and split 50-50 with employers for other workers. Oh, and compulsory medical insurance. But no inheritance tax.

Without going at all deeply into the whole topic of changing tax-jurisdictions, it's important to note that there's a difference between residency for personal income-tax and for personal death-duty. This island is my domicile, and so my estate won't be liable for Australian tax when I die. BUT... if I were to go back to Oz and die there, the authorities there might well demand death duties from my heirs. (To the best of my understanding, that is.) Having expatriated all my Australian assets long ago, they would have no luck, but still... So, at my advanced age, I keep well away from the place.

The OP no doubt realises that in this Covid Age, shifting around is a lot harder than it used to be, pretty much everwhere. I wish him luck, though.
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Old Oct 15th 2020, 5:29 pm
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Default Re: Tax residency in the British Virgin Islands

Originally Posted by Gordon Barlow View Post
.... Without going at all deeply into the whole topic of changing tax-jurisdictions, it's important to note that there's a difference between residency for personal income-tax and for personal death-duty. This island is my domicile, and so my estate won't be liable for Australian tax when I die. BUT... if I were to go back to Oz and die there, the authorities there might well demand death duties from my heirs. (To the best of my understanding, that is.) Having expatriated all my Australian assets long ago, they would have no luck, but still... So, at my advanced age, I keep well away from the place. ....
You bring up an interesting point, about "domicile" as it is remarkably difficult to change your domicile. People often think Domicile is just "where you live", but it's a lot deeper than that, and remains significantly, but not entirely, a function of where you are born.

In order to break your ties to your "domicile of birth" you really do need to sever all your ties to the country where you were born, sell all your assets there, and visit only sparingly. Even quite modest ties can come back and bite you (or rather your estate), and if you do succeed in replacing your domicle of birth with a "domicle of choice", that change can be reversed in an instant if, for example, as you reach the near end of your life and decide to return "home" to the country of your birth to spend your final days, you, or rather your heirs, will likely find that you have returned to having your domicile of birth.
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Old Oct 15th 2020, 5:59 pm
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Default Re: Tax residency in the British Virgin Islands

Indeed, at least the UK system/flow chart to prove this is relatively easy to understand / prevent being bitten by it...
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Old Oct 15th 2020, 7:50 pm
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Default Re: Tax residency in the British Virgin Islands

Those who wish to cahnge their domicile might like to consider serving with the French Foreign Legion. That MIGHT do it !
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Old Oct 15th 2020, 7:56 pm
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Default Re: Tax residency in the British Virgin Islands

Originally Posted by scot47 View Post
Those who wish to change their domicile might like to consider serving with the French Foreign Legion. That MIGHT do it !
"Change it"? If they're British they should be [email protected] stripped of it for serving in the FFL!
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Old Oct 15th 2020, 10:36 pm
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Default Re: Tax residency in the British Virgin Islands

Exactly That would surely change your domicile maybe a bit drastic for some. Could way of escaping from your ex though.
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