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Living in the UK as a Non-Resident

Living in the UK as a Non-Resident

Old Jun 24th 2023, 8:49 pm
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Default Re: Living in the UK as a Non-Resident

Originally Posted by Steerpike
I need to start really evaluating Roth IRA conversions. This year is my last year of bonkers US medical premiums - I'll be on Medicare next year and that's a big savings. It's all about paying a moderate amount of extra tax now vs significantly more taxes in the future. By the time I hit 72 I'll be receiving a substantial SS payment and a modest UK pension AND be forced to withdraw way more from my IRA than I want or need. If I don't do the Roth conversions now, I'll just be withdrawing money from my IRA in the future, paying taxes on it, and then sticking it back into savings. I see (yet another) big spreadsheet in my future ...
I obviously think Roth conversions are a good thing to do to even out future taxes. Now that you will be on Medicare don't forget to factor in IRMAA as Roth conversions count as income in the calculation. (if not careful you could dramatically increase your premiums if AGI is above $93k, and doubling it if above $123k for an individual filer)

https://www.nerdwallet.com/article/i...medicare-irmaa

Originally Posted by Steerpike
VRBO/AirBnB sound like good alternatives to buying. I presume there's no easy way around renting a car; no-one in my family has room for an extra car so just renting at around $80/day seems like a necessary cost.

On our recent trip to UK, in addition to the 'obvious' beauty spots like the Scottish highlands, the Lake District, and the Cotswolds, we drove through the Yorkshire Dales (eg, Hawes) and it was beautiful. I also visited a niece who lives on the outskirts of Manchester, but smack up against the Derbyshire / Peak District border, and it too was awesome. Then I visited another niece who lives near Sheffield (a dump of a place) but again, right up against the Peak District border on the other side (South Yorks) and it was gorgeous. Then we spent days in Derbyshire in general, which was also gorgeous. I looked at some property prices, and they seemed 'very reasonable' (especially coming from California!). For the first time since I left in '83, I actually thought "I could live here". But - the sun was shining the whole time and I really hate the cold and the rain, so I need to keep that in mind! Also worth noting, we had fantastic food during the entire visit, with the best food found in the north (the opposite of what I would expect - lots of great seafood in Scotland, for example).

How did you locate the house you rented?
VRBO is what we mostly used to find rentals from 1 week to a month at a time. For the 2 times we rented a house in England for 6 months at a time we used Rightmove.

The houses we rented in England had bus stops close by so we didn't need to rent a car for the vast majority of time, getting about via bus and train and renting a car as needed. For example once we took trains to Cornwall for a 2 or 3 week stay in a VRBO place at the south end of Fistral beach. Our daughter flew in from the USA and we met her at the train station in Newquay and got a taxi to our rental. We mostly got around with her by bus but rented a car for about a 4 day spell to go visit the more out of the way spots. When she went back to London we took the same train initially but stayed on it to stay on east side for a night in a motel where my wife's sister and husband met us on their way down down from Edinburgh where they live. Next day we all set off in their car for a 2 week stay in 2 locations in France followed by a week at St Margaret's Bay in a farm cottage on the cliff tops about 3 miles from Dover. Back to Edinburgh with them and then we rented a car for a couple of weeks touring the Highlands.

It's all about the adventure, this traveling, not just to escape the Texas summer heat.

Originally Posted by Steerpike
How is your daughter dealing with the weather? I guess it's early days yet if she just arrived in Jan!
She spent 3 weeks end of February last year, 2 weeks with us before we went to Barcelona for a week before a series of meetings, so got to feel the wonderful winter weather we have. (At this point we didn't know she was considering a move back here). Although she moved into her house end of January she had arrived and been staying with us since November, her partner spending all of December with us. We seem to get much milder winters these days although we did have a couple of spells of snow, enough to lie and be a few inches deep, and they loved crunching about town and hiking on the moor behind the town in the snow, and of course the town and countryside is beautiful in the snow. She works from home so no travel concerns.

Currently she is complaining about the heat because of course the houses here don't have A/C so it wouldn't surprise me if by next summer she has installed A/C or at least one or two standalone A/C units. (Nicknamed Daleks because of their shape). We haven't had any rain of significance since the beginning of May (2 months now) so, being a keen gardener like my wife, she is complaining about the dry weather, like my wife. (We have 6 water butts which were all empty until we had some heavy overnight rain a few days ago but the heat* has not abated yet.)

* or rather what we northerners call heat

In LA she always had air purifiers in her apartments and house and was delighted when she checked the air quality here before moving back. Air so clean you can't see it.

We are right on the edge of one of Britain's 7 international "Dark Sky" areas - the N. York Moors National Park.

https://www.wanderlust.co.uk/content/guide-to-britain-s-international-dark-sky-reserves/
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The North York Moors is the area that inspired Bram Stoker’s Dracula and is one of the darkest places in the country. Its wide open skies have always made them popular with astronomers. But it wasn’t until December 2020 they were officially designated an International Dark Sky Reserve and became one of the newest International Dark Sky Reserves in the world.

Owing to the low levels of light pollution and clear horizons, visitors can see up to 2,000 stars at any one time with the naked eye in the darkest areas of the reserve. Stargazers will find friendly locals, evocative backdrops and peaceful wild spaces making the North York Moors the perfect location for getting closer to the night sky.




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Last edited by durham_lad; Jun 24th 2023 at 8:52 pm.
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Old Jul 5th 2023, 5:17 am
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Default Re: Living in the UK as a Non-Resident

Pulaski, does having a home available in the UK take precedence over the other residency tests? I work full time in the US, spend less than 91 days per year in the UK, and less than 31 days per year working in the UK. I do own a home in the UK. The way I read it is that first you look to the automatic overseas tests/automatic UK tests and if you meet those tests you don't have to look to the sufficient ties test (which is where the accommodation tie is considered/tested).
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Old Jul 5th 2023, 6:40 am
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Default Re: Living in the UK as a Non-Resident

Originally Posted by maxibob
Pulaski, does having a home available in the UK take precedence over the other residency tests? I work full time in the US, spend less than 91 days per year in the UK, and less than 31 days per year working in the UK. I do own a home in the UK. The way I read it is that first you look to the automatic overseas tests/automatic UK tests and if you meet those tests you don't have to look to the sufficient ties test (which is where the accommodation tie is considered/tested).
As I used to understand the rules, yes, it used to be automatic - you would lose your non-resident status upon arrival in the UK if you had a home available anywhere in the UK.

I don't know if the rules have changed, it's possible, as I think that rule, and many others date from the 1970's when rock stars were fleeing the UK to avoid paying 83% income tax with a 15% investment income surchange, and HMR was doing everything they could to snag as many people as possible and tax their income.

Last edited by Pulaski; Jul 5th 2023 at 7:38 am.
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Old Jul 5th 2023, 7:28 am
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Default Re: Living in the UK as a Non-Resident

Originally Posted by Pulaski
As I used to understand the rules, yes, it used to be automatic - you would lose your non-resident status upon arrival in the UK if you had a home available anywhere in the UK.

I don't know if the rules have changed, it's possible, as I think that, and many other rules date from the 1970's when rock stars were fleeing the UK to avoid paying 83% income tax with a 15% investment income surchange, and HMR was doing everything they could to snag as many people and tax their income.
Does 'available' mean, empty / not rented out, etc? What if you allow a relative to live there but don't charge rent?
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Old Jul 5th 2023, 7:37 am
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Default Re: Living in the UK as a Non-Resident

Originally Posted by Steerpike
Does 'available' mean, empty / not rented out, etc? ...
Yes, my recollection was that it had to be available - so if rented at arms length to stranger it would not be available
.... What if you allow a relative to live there but don't charge rent?
That is definitely a question to ask an experienced professional, but my best guess is that if you "rent" it to anyone, relative or not, with the "string attached" that you can come and use the spare bedroom whenever you like, that would be "available".
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Old Jul 5th 2023, 8:33 am
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Default Re: Living in the UK as a Non-Resident

Here is what I found:
"If you meet any of the automatic overseas tests, you are automatically non-resident for the tax year. This will be irrespective of whether you satisfy any of the automatic UK tests or the sufficient ties tests. You should therefore consider the automatic overseas test first. There are 4 automatic overseas tests any one of which will make you not UK resident for tax purposes. Broadly, they are as follows:
  1. You were resident in the UK in one or more of the 3 previous tax years, and you spend fewer than 16 days in the UK in the tax year under consideration
  2. You were resident in the UK for none of the previous 3 tax years, and you spend fewer than 46 days in the UK in the tax year under consideration
  3. You work full-time overseas for the tax year under consideration with "no significant break", you spend fewer than 91 days in the UK in the tax year, and work for more than 3 hours in the UK on fewer than 31 days in the tax year
  4. The 4th test is only relevant to people who die during the tax year."
I believe the automatic overseas test trumps the other test, and if you meet one of these tests you would not be considered UK resident for tax, even if owning a home in the UK.
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Old Jul 6th 2023, 3:21 am
  #22  
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Default Re: Living in the UK as a Non-Resident

KPMG have produced an excellent UK tax residency chart.

https://assets.kpmg.com/content/dam/...-flowchart.pdf
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Old Jul 6th 2023, 4:43 am
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Default Re: Living in the UK as a Non-Resident

Thanks, I found the KPMG chart too, and it suggests to me that property and other ties to the UK don't get taken into consideration unless you do not meet any of the tests at the top 3rd of the chart.

Last edited by maxibob; Jul 6th 2023 at 5:45 am.
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Old Jul 6th 2023, 4:51 am
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Default Re: Living in the UK as a Non-Resident

Agreed. For example, if you have a property in the UK but meet the non-residency criteria, the property isn't relevant.
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