nun

The form you filled out was probably an R85, the R105 does not depend on having a UK personal allowance......it depends on you being non-resident in the UK

Pomster

Tax allowance is for all Brits- resident or not.
I googled " uk personal allowances for non residents' and lo and behold the answer was there

https://www.gov.uk/tax-uk-income-live-abroad/overview

ukthesis

Having read the longer post at the start of this thread. As the poster says, it is complex. Perhaps if I give what I "think" will happen, the poster can give me more specific information as to my tax situation.

I am a UK resident and I own a home I live in, in the UK. I have no plans to sell this home, so it is available for me to return to. I plan to marry in Moldova (outside the EU or EEA) in the summer. I come up to state retirement age next year, but my pension is frozen in Moldova and of course I lose the Winter Fuel Allowance too.

The HMRC told me I lose my UK personal allowance in Moldova. But this presumably refers to a situation where for tax reasons I am classed as "resident" in Moldova and not in the UK. A friend told me to ask whether, if I returned to the UK in a tax year for 90 days or more, I would be classed by the HMRC as UK based just for tax purposes. He claims to know a guy who returns to the UK for 90 days for just this purpose. So this is why I am asking. So then I would retain my UK personal allowances.

And also the tax free status of my ISA in the UK.

I am fairly sure that for immigration purposes, if I only return in a year for 3 months to the UK, they would consider that my main home is in Moldova. Therefore, I would not be a UK "resident." However, the tax rules may be different.

Looking at the message above, the posters seems to say (and I know it's complicated) that if I own my house here in the UK and return to the UK in a tax year for over 90 days, I am classed as resident in the UK for a tax purpose.

On the other hand, there is a further sentence saying that I may have to also have no overseas "home." But what is the definition of a home? When I go across there, for over 30 days a year, I have somewhere to stay. Is this a home?

Later in the message is the advice that if I spend over 90 days in the UK during two tax years, I can continue to get UK personal tax allowances. Which seems quite clear and easy to understand and it would be no problem to qualify for that. But it seems to be contradicted by the information above it that it's not that simple.

I can answer any other questions, no problem.

Pistolpete2

The clincher regarding being deemed UK tax resident is:

UK Ties needed if you were UK resident in none of the three tax years before the tax year under consideration

- Days spent in the UK in the tax year under consideration - Over 120 - At least two (which would be Accommodation Tie and 90 day tie, if indeed it is applicable)

so then as soon as you become tax resident the count goes down to 90 days in the next tax year, when you have the same ties.

NOTE that the 90 days USED TO BE the golden rule on its own until a guy by the name of Gaines-Cooper worked the 90 days at the same time as he maintained other connections to the UK in terms of accommodation and family ties and HMRC said that in actual fact for tax purposes he had never left the UK in the first place (and he lost his multi-million pound case) - hence the Statutory Residence Test (SRT).

Home was only mentioned in my earlier post when addressing AUTOMATIC tax residence. However its the ties to the UK that would end up making you tax resident because the AUTOMATIC test fails to make you tax resident. Also However, IF you maintain your UK home un-letout and spend more than 30 days there in the tax year and less than 30 days in your overseas home you would indeed be AUTOMATICALLY UK tax resident.

The definition of HOME is covered in Annex A of the SRT rules per my previous post. Note that in this Annex is states:

The concept of home as described in this guidance relates only to the SRT. The guidance does not apply for the purpose of applying the residence Article under a double taxation agreement. Double taxation agreements have additional qualifiers that are not included as part of the SRT and so the two terms do not have the same meaning.

Here is an example on page 89 of the SRT rules which might help you understand the HOME rules, though it is in reverse vis-a-vis the UK.

Ivan left the UK to work in Germany. He lets the flat he previously lived in to a tenant on a two-year lease. After 18 months he was made redundant and returned to the UK. The rental agreement on his flat gave exclusive use of the property to the tenant so Ivan arranged to stay with relatives and friends until the lease expired. For the period his property was let it is not his home. However, if the rental agreement had allowed Ivan to use the flat and he had stayed there when he visited the UK it would have remained his home throughout.

As per previous, you can keep your ISA while you are not tax resident in the UK but cannot pay into it until you return to take up TAX residency.

There is no question that immigration residency and tax residency are entirely different issues, as is (permanent) residency in the UK which allows you to receive ALL NHS treatment at no charge - but we won't go there.

ukthesis

I'll read your VERY HELPFUL post later, and thank you. I meantime took the time out to look at a Revenue advice form on the internet.

Basically, I need to know at what point I lose my UK tax allowances, just raised to over £10,000 a year.

So for example if I "live" in Moldova in the middle of this coming tax year, 2015-2016, I receive "split year treatment" in my UK tax affairs. In other words, it seems to say that for part of the tax year, I do get the UK tax allowance. The question then is when this stops.

However, I do not have to own the property in Moldova to be classed as having somewhere to "live" over there, so far as I can see. So I could live in Moldova in rented accommodation for example, but this would count against me in the same way as "owning" the place in Moldova I live in.

The part I noticed was this "90 days tie" test. I am not sure if in order to use this, I have to live in my house in the UK for 90 consecutive days or not. In other words, to use this, that I cannot return here for 30 days each for three times in a tax year. So in that case (30 X 3) I could not use this to restore my UK tax allowance if I lost it.

Pistolpete2

For 90 days tie:

"You have a 90-day tie for a tax year if you have spent more than 90 days in the UK in either or both of the previous two tax years" - total, not continuous. Not sure why it says both when it says either .

I would say that in the same way that I personally benefit from the UK/US double taxation treaty so that I get to offset US withholding taxes on US income against UK taxes on the same income and get to deduct my UK personal allowance as a UK tax resident but obviously nothing from the US, there must be some sort of allowance for you in Moldova that applies under the double taxation treaty BUT I in no way profess to know how it applies or what it is likely to be in spite of glossing over the wording as posted by BritInParis.

In general - You have to be very careful what you wish for if you want to be deemed UK tax resident. Unless you pay tax as a non-dom under the remittance basis you will be taxed on your World income in the UK.

IF your father was uk-domiciled at your birth you are also uk-domiciled until you can show that there is sufficient permanency in a move away to become non-domiciled for tax purposes.

ukthesis

Again, I will look at the posts later.

The only UK source income I would have when I go there are the UK bank accounts I am keeping, my UK state pension when I retire and, if I decide to rent out my UK house, the rent from this.

So there is not a lot of money involved but enough to make me research the issue.

Looking at the tax form, the issue will be my Statutory Residence Test. Where I am resident for UK tax purposes. The plan is for me to live over there most of the time, but I could arrange to return to the UK for a total of 90 days in a tax year. At least I would like that option which might give me continued access to UK tax allowances.

The other issue is Split Year Treatment. But how this is calculated would depend on where they define my "home" as I imagine, under the Statutory Residence Test.

Pistolpete2

If you maintain a home in the UK which is available to you and work is not part of the equation, it seems that you would not be eligible for split-year treatment under any of the available cases. This is why it is critical to have the use of a double taxation treaty if you keep two homes, one in the UK and the other elsewhere.

To be eligible going into the UK you would need to formally (goodness knows how?) sever your home arrangements in Moldova most straight-forwardly AT the point you leave Moldova rather than at some point after you have arrived in the UK - Start to have your only home in the UK (case 4)

ukthesis

But will it not be the case that if, for tax purposes, I am resident in Moldova at the end of this year only, which will probably be the case, I will be able to use the UK personal tax alloewance until that time? So half the year is covered by this personal allowance (let's say April to December) as I am classed as resident in the UK, and the rest of the UK tax year (January to March) is not covered by a UK tax allowance, when I am classed as resident in Moldova.

This is what they mean by split arrangements, where there is a change in the middle of a UK tax year from one type of residence arrangement to another, depending on when a change of residence occurs. This is where the HMRC arrangements need to be taken into account.

I imagine there are very rare situations where a formal change of residence coincides with the start and end of a UK tax year, so this is a very common occurrence and issue.

Pistolpete2

Split year treatment means that you are only taxed for the period in the UK that you are deemed to be tax resident there. It has nothing to do with personal allowances. However, you get a personal allowance if tax resident and not tax resident somewhere else under a double taxation treaty (we've established). If you change residency, the double taxation treaty affects your taxes from the date you move to the country with the treaty arrangements.

If you maintain your UK property, available to you to use as a home then there is no split-year treatment of tax. Even if you rented it out, so it is no longer your home you must then under case 3:

"spend fewer than 16 days in the UK post departure in the tax year" and
in relation to a particular country, either:

"become resident for tax purposes in that country within six months

be present in that country at the end of each day for six months, or

have your only home, or all your homes if you have more than one, in that country within six months."

got to go now, and live the rest of my life.

ukthesis

Thanks again and I will find the time to read your previous messages. I just wanted to briefly clarify things in case of a factual misunderstanding.

ukthesis

To poster POMSTER
I am going through the thread to take notes. The link you gave infers I keep the UK tax allowances if I live abroad, which, if I have it right, contradicts the HMRC advice:

"You pay Income Tax on income above your tax-free limit (‘Personal Allowance’), if you’re eligible for it, eg you have a British passport."

In addition, to confuse things more, it says that "non-residents" don't normally pay UK tax on the UK state pension. I was also advised by the HMRC that ALL my UK sourced income is not only taxed by the HMRC but again, that I lose all my UK tax allowance on the state person. So that I pay UK tax on ALL my UK state pension. So this website just creates confusion.

If it makes a difference, the HMRC class me as a Self-Assessment person.

TopNik

Hello ukthesis,

If you are not resident in the UK you are entitled under UK law to the same personal allowances and reliefs that would be available to you if you were resident in the UK if you are a British citizen or a national of another member state of the EEA.

TopNik

It is highly likely that the personal allowance for UK non-residents will be abolished with effect from the 2017/18 tax year.

The withdrawal of the UK personal allowance will leave many facing annual tax liabilities and you will not be able to simply input expenditure claims for previous years during the 2017/18 tax year when the changes are expected to take place.

Therefore, efficient tax planning is as always very important but even more so leading up to this date.

ukthesis

Today, I organized to speak face to face early in April with a HMRC agent about all this. Frankly, the more I try to research my tax situation over there, the more confusing information I'm getting. So I am expecting he can give me definitive answers.