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buying a car in the uk - tax implications?

buying a car in the uk - tax implications?

Old Jan 31st 2012, 9:47 pm
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Default buying a car in the uk - tax implications?

Hi guys,

Long-time reader but actually need to post on this occasion in the hope I can get some advice. The long story short is that for family reasons my wife has remained in the UK while I'm working out here. Our car back there is 10-years-old now so we're buying a new one and as I'll have to send money home for the purchase I'm concerned about any potential tax implications.
The only authoritative source I've been able to speak to seemed to think that as long as the car is registered in my wife's name it's treated as a gift and there's no tax liability, but given the sums involved I'm understandably paranoid.
In terms of context (if it's relevant), I've been out here for more than a full tax year and expect to be here for the foreseeable future.
Apologies in advance, as I realise I'm just relying on goodwill from other forum members.
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Old Jan 31st 2012, 10:14 pm
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Default Re: buying a car in the uk - tax implications?

Is your question about whether you'll be taxed if you send your income back to the UK? Provided you are UK non-resident for tax purposes you can remit overseas income to the UK without paying income tax. If you wil spend less than 91 days in the UK during this tax year (ending 5th April 2012) you should be deemed non-resident.

Bear in mnd that the rules are changing from April 2013 so that having 'connecting factors' such as a spouse and property in the UK wil reduce the number of days you can spend there before beig considered resident.

Your 'authorative source' seems somewhat off the mark...
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Old Jan 31st 2012, 10:30 pm
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Default Re: buying a car in the uk - tax implications?

Originally Posted by Meow
Is your question about whether you'll be taxed if you send your income back to the UK? Provided you are UK non-resident for tax purposes you can remit overseas income to the UK without paying income tax. If you wil spend less than 91 days in the UK during this tax year (ending 5th April 2012) you should be deemed non-resident.

Bear in mnd that the rules are changing from April 2013 so that having 'connecting factors' such as a spouse and property in the UK wil reduce the number of days you can spend there before beig considered resident.

Your 'authorative source' seems somewhat off the mark...
Hi Meow,
Thanks for such a quick response and I should have clarified: I already send back money on a monthly basis to cover the mortgage and bills, but this is the first time I'll be sending money back that isn't automatically 'swallowed up' by such costs, so I wasn't sure if the car as an asset would somehow be tax liable. I hoped that wouldn't be the case on the basis of the circumstances you've outlined, but as previously mentioned, didn't want to make an assumption based on the amount involved.
I'm aware of the 90-day rule and to date (this April will mark the completion of three full tax years here) have averaged about 20-30 days a year so comfortably inside it.
I should also add a thanks as it was due to reading this forum late last year that I became aware of the changes due in April. Again, I'm hoping they won't impact on me significantly due to the limited time I'm currently spending in the UK.
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Old Jan 31st 2012, 11:19 pm
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Default Re: buying a car in the uk - tax implications?

Originally Posted by dandare
Hi Meow,
Thanks for such a quick response and I should have clarified: I already send back money on a monthly basis to cover the mortgage and bills, but this is the first time I'll be sending money back that isn't automatically 'swallowed up' by such costs, so I wasn't sure if the car as an asset would somehow be tax liable. I hoped that wouldn't be the case on the basis of the circumstances you've outlined, but as previously mentioned, didn't want to make an assumption based on the amount involved.
I'm aware of the 90-day rule and to date (this April will mark the completion of three full tax years here) have averaged about 20-30 days a year so comfortably inside it.
I should also add a thanks as it was due to reading this forum late last year that I became aware of the changes due in April. Again, I'm hoping they won't impact on me significantly due to the limited time I'm currently spending in the UK.
It'll be fine.

Keep an eye of my blog for info on the tax changes once they are finally confirmed in the next few months.
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Old Jan 31st 2012, 11:27 pm
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Default Re: buying a car in the uk - tax implications?

Originally Posted by Meow
It'll be fine.

Keep an eye of my blog for info on the tax changes once they are finally confirmed in the next few months.
Thank you. Definitely will.
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Old Feb 1st 2012, 11:29 pm
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Default Re: buying a car in the uk - tax implications?

I've been here 3 years and, like you, repartriate nearly all of my earnings for my wife and kids in the UK. As Meow says, there is absolutely no issue provided you remain not-ordinarily-resident (as you are doing). Last year HMRC sent me a letter stating that I no longer have to submit a tax return--how your money's spent in the UK is irrelevant.

Mind you, if I'd imagined the problem you'd imagined, I might have been able to persuade my missus that we couldn't buy her that BMW...
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Old Feb 1st 2012, 11:54 pm
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Default Re: buying a car in the uk - tax implications?

Originally Posted by Bahtatboy
Mind you, if I'd imagined the problem you'd imagined, I might have been able to persuade my missus that we couldn't buy her that BMW...
A very good point sir!
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Old Mar 6th 2012, 1:00 am
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Default Re: buying a car in the uk - tax implications?

Originally Posted by Bahtatboy
I've been here 3 years and, like you, repartriate nearly all of my earnings for my wife and kids in the UK. As Meow says, there is absolutely no issue provided you remain not-ordinarily-resident (as you are doing). Last year HMRC sent me a letter stating that I no longer have to submit a tax return--how your money's spent in the UK is irrelevant.
Hi, just to clarify, anyone who leaves the UK to work, but it ordinarily resident in the UK, and adheres to the rules can claim non residency for tax purposes. Which means, as Meow says, you can bring your money back into the UK and spend it how you like.
All the labels HMRC like to use just causes confusion - a good way to prevent people claiming what they can!
Usually after a couple of years of completing tax returns, if HMRC are happy that you are not going to have a tax liability (unless your circumstances change) they will stop requesting them.
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Old Mar 6th 2012, 4:00 pm
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Default Re: buying a car in the uk - tax implications?

Originally Posted by Meow
Is your question about whether you'll be taxed if you send your income back to the UK? Provided you are UK non-resident for tax purposes you can remit overseas income to the UK without paying income tax. If you wil spend less than 91 days in the UK during this tax year (ending 5th April 2012) you should be deemed non-resident.

Bear in mnd that the rules are changing from April 2013 so that having 'connecting factors' such as a spouse and property in the UK wil reduce the number of days you can spend there before beig considered resident.

Your 'authorative source' seems somewhat off the mark...
Indeed, the authoritative source seems to be advising on IHT rather than income tax...

The changes next year will be interesting to see...a lot of expats who have a foot in the door will probably be stung.

N.
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