scotinsiam

Hi,

I was hoping someone has been in my situation and could offer some guidance, I am Scottish and have been non resident in the UK since 2005. I am considering returning, but am somewhat concerned as my assets which give me an income are based in Singapore and Isle of man (bonds and equities) and I am unsure of the UK tax implications should I return to the UK as a resident again.


thanks

Scotinsiam

durham_lad

My wife and I returned from the USA 5 years ago and most of our investments are still in the USA. HMRC taxes a person on worldwide income but that is not a problem as we simply list interest, dividends and capital gains, using HMRC exchange rates. To get the best tax rates for dividends and capital gains I converted our mutual funds into HMRC Reporting funds, otherwise all income from them will be treated as regular income.

https://www.gov.uk/government/public...eporting-funds

https://www.gov.uk/government/public...r-2021-monthly

csdf

Is it taxable whilst it remains offshore, or are you repatriating interest, dividend and capital gains?

durham_lad

I pay taxes on the arising basis which is more usual. (I am not a non-dom or such). As such taxes are due when income arises regardless of when it is remitted to the UK.

scotinsiam

Currently I am not taxed. I worked in tax free countries and saved offshore as well as being non resident. I am considering either cashing in and returning with a lump sum or continuing to take my dividends & income from the investments offshore but finding it difficult to get advice.

E2Brutus

But don't you pay taxes on the US assets and then get a credit for that tax paid against the tax you must pay in the UK?

durham_lad

it’s the other way round for my US income. Since I am a USC that lives in the UK I pay UK taxes on my US income then claim foreign tax credits on my US income tax return to reduce my US taxes. I also have to pay US taxes on my UK income and claim that back on my US return.

Both the US and UK tax me on my worldwide income but the UK is the primary collector of taxes. The 2 exceptions in my case is my US SS and UK OAP, both of which are taxed only by the UK.

E2Brutus

I am a UKC, so I think I will pay taxes in the US and then get a credit for that against any excess UK taxes due. I will check with my accountant. I may just put all the assets in a US corporation so that I only have to pay taxes in excess of the corporation tax rate when I distribute. At the moment some are in LLCs and some in a Trust.

dean350

As a UK resident, you will have to declare the income from the offshore investments to stay legal with HMRC. You may well be liable for UK CGT when you sell any of those assets when resident in UK. If you sell up before leaving, bring cash into the UK and then buy them again here, then any value for future CGT will be set at the value you rebuy them in the UK which can help. If you come here to work, put as much in a SIPP pension as possible as that becomes free of IHT and 25% ay be taken tax free after 55/57. You will need advice in general about IHT if your portfolio is large. Govt will take 40% of all above 325K unless you leave to spouse , its in a pension or in a trust.

Johnboyuk

Basically, as with many countries, UK taxation is based on residency so technically there is no such thing as offshore investments (unless you are a politican).