Kelabit

Hi,

I'm new to the Forum and want to share my experience. I have been non-resident since 1993 and I became MM2H about 4 years ago and planned to spend most of the rest of my life here.

However, having family in UK, I like to visit several there times a year and I wanted to know if there were any tax implications which would impact on my pension (non-UK occupational pension) if I did so for extended periods. I foolishly wrote to HMRC for the advice and am now bombarded with tax returns never having had to since 1993.

Yes, the pension would also be taxed, after a certain period of time in UK, even although it is from a non-UK source and does not ever reach UK.

My advice to others is that if you have a tax matter as an expat; and want to stay on the straight and narrow - ask an tax expert - someone who knows the rules - don't excite HMRC.

Pistolpete2

Check this out for starters as it covers those who spend time in the UK on a regular basis:

http://www.direct.gov.uk/en/MoneyTax...heUK/DG_078447

As you can see, you do not become resident for UK tax purposes unless you spend more than 183 days in the UK in a tax year, or an average of 91 days over a maximum of four consecutive tax years. If you are resident on a regular/habitual basis you may become ordinarily resident for tax purposes but even then you will only be taxed on income remitted to the UK, assuming you aren't actually doing anything in the UK to earn anything.

HMRC send you the tax returns to get you to fill out the residence and domicile sections for clarification as these are critical to your tax status. They aren't looking for anything else.

I live overseas and send the printed-off residence sections to them every year to make sure they know that's my status, namely not resident, not ordinarily resident and not domiciled.

It is advisable that you keep below the thresholds that would cause you to become resident and ordinarily resident for UK tax purposes as you could end up with a situation where, either you pay UK tax on your world income less UK personal allowances or you pay tax on remitted pension (to cover your living costs while in the UK) with no personal allowance to offset it.

Kelabit

Pistolpete2,
Very many thanks for this most useful piece of information. I admit getting anxious as I maintain a small cottage in Scotland for emergencies (and eventual retirement) - even although I am seldom there.
So I now see that as long as I continue to be within the threshold that I remain non-resident for tax purposes.
Again most grateful to you for the timely reply.
Regards.

bakedbean

Hi Kelabit. I may be being a bit thick here, but you say you have a cottage in Scotland and will eventually retire there, and you also said that you intended to spend most of your life here (Malaysia). I'm confused.

Kelabit

Hi bakedbean,
I mean to return to the Highlands a very long time from now - I maintain the cottage for that.
I should have written "most of the year" not "most of my life".
Thanks for picking up on this.

bakedbean

Ah okay. I'm retired here and intend to pop my clogs here also, at least that's the current thinking