Tax when Living Abroad ?
 

I am a british citizen and make my income online via the internet.

I am thinking about moving to Cancun, Mexico, because the place is stunning!

But I would like to know if I move, which country will I have to pay tax in? and will I have to pay tax at all?

What about offshore bank accounts, would they save me paying lots of tax?

Thanks

Mark

Re: Tax when Living Abroad ?
 

Hi Mark

I believe that HSBC Offshore Banking would be of help; see here. You get even better terms if you are a Premier customer for which you only require a provable income of more than £75k pa. Coutts is also very good and has looked after many of my friends well in the past although the last time I checked in order to get the full services you need a far higher income or liquid/fixed assests in excess of a million £ which is more difficult...

I went with HSBC Offshore Premier and they have been great so far - I hope this helps.

Phil

Re: Tax when Living Abroad ?
 

Thanks Phil,

Do you live abroad?

Which country?

Re: Tax when Living Abroad ?
 

Hi Mark

I moved from London to Italy and wanted a service to help me manage my finances but since have moved back to London. I am moving (hopefully) to Mexico in December though and so have been preparing and HSBC Premier has been great for me so far.

Best Wishes and any further Q's please don't hesitate to ask

Phil

Re: Tax when Living Abroad ?
 

Hi
Would that HSBC premier customer apply to turkey to, I live now in Turkey 2 years and have the said account status. But i cannot seem to find any information about benifits etc. I do agree that when moving funds from one country to another and between currencies HSBC have been excellent.
As with the turkish lira interest rates on savings are excellent and run at 14% net. I came across your post on taxation as Later this year I will be drawing pension along with a lumpsum and will be as such moving that along with future pension payments into my branch here.
I ask the question as the English and turkish versions of HSBC seem to be similar apart from the rates of interest.
Thanks FoxyP

Re: Tax when Living Abroad ?
 

Günaydın FoxyP

The HSBC Off Shore services form a separate division, and a far as I am aware they are available to all HSBC Premier customers - regardless off account nationality and the advantages are good, see here.

Depending of you circumstances however you may be able to arrange a better deal: I just quickly called a friend of mine who lives in Uskudak in İstanbul, and he has excellent Offshore facilities through his HSBC Platinum account. I am not sure of the criteria to get one (and neither is he ;)) but it may be worth a question in your local branch.

Görüşürüz, Phil

Re: Tax when Living Abroad ?
 

The basic facts here are that if you become a Mexican resident then you have to pay tax on your worldwide income regardless of nationality. Foreign nationals are regarded as residents as soon as a home is established in Mexico, unless you spend less than 183 days in the country. Foreign workers in Mexico are not usually considered as residents if they hold immigration papers and have not established a home in Mexico.

You will thus be taxed in Mexico on your earned income irrespective of where it has arisen. Tax rates can range from 3% to 35% typically and tax credits are given foreign earned income already taxed at source. The system is basic and straight forward. We have had anumber of clients who have lived and worked in Mexico in recent years without any problems.

Re: HSBC then I will not comment on a bank except to say that their advice is very limited, great advice for setting up accounts etc but when it comes to Money Management as all banks they overcharge and typically operate on an up front commission basis for offshore investments.

Re: Tax when Living Abroad ?
 

There is also a hell of a lot of other Banks, catering for the offshore client, this can be in any Country that you are not living in.

If you want to pay tax, it depends what income you declare and time spent in each Country,

Re: Tax when Living Abroad ?
 

I never realised it was optional ;) :rofl:

Re: Tax when Living Abroad ?
 

You will not qualify for a FED, foreign earnings deduction, unless you register as a non-resident in UK with the HM Insp Taxes. And check to see if there is a double taxation agreement with Mexico. This should apply for other counties.

I suggest going none resident put your money offshore Channel Islands, Isle Man, Caymens, etc etc. Then just bring into the country of residence enought to cover your costs, thus paying money on declared income (imported) not total income, not evasion just avoidance.

PS Some countries allow non-residence ie tourist status with renewable visas thus no tax, LOL

Re: Tax when Living Abroad ?
 

This is note relating to all expats, there is an apparent sea change from the Inland Revenue with their interpretation of non residency status. Up till now the fact that an individual worked abraod and spent less than 90 days out of the UK in any one tax year was enough to constitute an invidual being regarded as non resident- not any more it would appear. The matter of non residency and domicle has been under review since 2003 and is increasingly under the radar of the Inland Revenue. It would now appear that the status as described above is not sufficient for non residency status. The fact that someone has a main residence in the UK in which their spouse lives, has bank accounts in the UK, rental property in the UK, or else whose foreign company pays for their flights back to the UK is sufficient for the Inland Revenue to consider that person still to be UK residient for tax purposes.

Whilst this seems at odds with the Inland Revenue publication IR20 then it is important to note that this publication as with anything else the revenue publishes are just guidlines open to interpretation.

I am dealing with the three main Inland Revenue offices re this matter and as soon as I have the revenue to commit their views to paper (this will be a miracle by the way if they do commit themselves !!) then I will publish it.

My basic advice to anyone who works and lives abroad is to always make sure you can obtain a tax certificate if taxes are paid locally by the employer in the country that you work on your behalf. These may be required to help eliviate any potential tax liability.

Re: Tax when Living Abroad ?
 

Here's one for ya. I work in Cancun for a mexican company and the taxes are deducted out of my wages. I am starting to make an income online as well, however the commision cheques are sent to my parents house in england, and also by direct deposit into my english bank account and my websites are registered as "individual" not business, but to my English address. Do I pay tax on this income in Mexico or England, or can I get away with paying nothing at all. I live full time in Mexico. Hope this makes sense, thanks in advance for your help guys.
Mat

Re: Tax when Living Abroad ?
 

Hi Kirk Mat, Couple of things, why are you using a UK Bank account, do you not have an offshore one, also open a bank in America, Laredo National Bank, its free and a free account. Everyone should have one. If the money is being paid in the UK, but it can depend on what ties you have. I would be careful and speak with a UK accountant to check. But you should not be paying income tax in two places. If you were to send your proof of Mexican taxes and residency that should, keep fingers crossed satisfy Inland Revenue, best of luck,

Re: Tax when Living Abroad ?
 

I would agree it more appropriate to have an offshore based bank account, stay well clear of the UK. There is a double taxation agreement in force between the UK and Mexico. I think it sensible for your commission income to be paid offshore and then declared in Mexico rather than you have potential problems with the UK authorities. It should also be noted that you can pay tax in two countries, all that a double taxation agreement does it to offset tax paid in one country against a tax liability in another country and vice versa.

Re: Tax when Living Abroad ?
 

hi there.im new at this but just wounderd if you have found out any information so you can help me out. well i'm going to work for a hotel in cancun mexico just waiting for imigration to give my boss over there the all clear for me to go over. reading all this about tax and banks wot advise have you got for me i don't no anything so any little will help.