non resident or off shore account??

mickra7851

Hello,

May I just say what a great site this is very informative.
My question is, I currently working abroad. I work 6 weeks work, 6 weeks home (some times it fluctuates to 8 weeks work 4 home in UK)throughout the year.
I am on a good wage which will push me into the 40% tax bracket. I like many others are not really happy paying this amount of tax for such little time in the UK. I am mulling over becoming a NON resident which will mean spending less then 90 a year in the UK. I do own a property in UK as well as the 2 ISA accounts and other bank accounts.
Would it work if I was to bank offshore then pay myself a smaller wage a month?? Is this legal or would I be paying tax on the whole wage then tax again on the percentage I send to my UK bank account?? I have a tax accountant and due to the amout of time I was going to spend in the UK as in 6/6 rotation I declared my self as self employed. If i get permanent 8/4 then I will just take a holiday with the family to ensure the 90 day rule.

Thanks

Please any advise would be appreciated.

Nosht

I think that you must be a resident in the UK to take advantage of ISAs.

N.

System

As has been shown in a recent court case, you need to sever all ties with the UK to be classed as non-resident.(Judge was reinforcing the current rules anyway). After this case I would think that HMRC will be looking more closely at non-res claims.

Owning a property & 2 ISAs in the UK blows that idea out of the water

dudes_2

Maybe look into the difference between non-resident, and non-dom.

Are your earnings UK, or from outside of the UK?

Murdina

If you are genuinely able to show yourself to be non UK resident (which in the light of the recent case & on the basis stated I think may be unlikely) do not overlook the fact that you may become resident elsewhere. They may have higher tax rates than here (watch out for social security too).

And also depending on where you are the rest of the time you need to consider the residence tie breaker clause in the double taxation agreement between that country and the UK which may determine which country taxes you.

You need a tax adviser who is experienced in handling international clients and make sure you put plenty of money by if you do go for non residence. I've read that the taxpayer in the case mentioned above might be getting bills for £30 million or more..........

TM1976

Based on what you say here you won't be classed as non-resident so you should pay tax on your interest whether you are banking offshore or not.

Cook_County

Rotational workers have always remained UK resident. There has been no change here. You can still claim DTR or detached duty reliefs on your UK return.

mickra7851

Hi thanks for the reply after speaking to the guys here most Brits either live abroad or they are non doms. Using the less then 90 day rule. Not Expats. The recent ruling ref the millionaire was slightly different to a small fish guy like myself. I earn my salary paid by an US company into my UK account. Where I will then be taxed at 40%. I realise that if I go the non dom route I will lose my Isa`s. But guess there are other ways to save. I just begrudge paying 40%tax when for 6 months or less of the year I am away. That is not taking into account the council tax and other stuff. Thanks very much for the replies. What about off shore banking can I pay my salary into a offshore account then pay myself a smaller monthly wage into my UK current account.

mickra7851

Cook I have never heared of DTR should an accountant know ???


Thanks

John_Pierpoint

Non resident and non domicile are nothing like the same thing; the terms are not interchangeable.

As we have learned this week with Lord Ashcroft, it is possible to be temporarily resident non domicile, so he could pay tax only on those earnings he chose to receive in the UK..

In a minute Alice In Wonderland and her million pound a year accountant will be along to explain all.

TM1976

mickra7851 wrote: »

Hi thanks for the reply after speaking to the guys here most Brits either live abroad or they are non doms. Using the less then 90 day rule. Not Expats. The recent ruling ref the millionaire was slightly different to a small fish guy like myself. I earn my salary paid by an US company into my UK account. Where I will then be taxed at 40%. I realise that if I go the non dom route I will lose my Isa`s. But guess there are other ways to save. I just begrudge paying 40%tax when for 6 months or less of the year I am away. That is not taking into account the council tax and other stuff. Thanks very much for the replies. What about off shore banking can I pay my salary into a offshore account then pay myself a smaller monthly wage into my UK current account.

Although it's possible to change your residence, changing your domicile isn't an option for most people. You can only claim non-dom status if you can demonstrate you "belong" somewhere else,eg if your father was born overseas.

Residence you can change but you would have to live abroad as the 90 day rule is not an absolute test of residence - eg you keep a home in the UK so you aren't bona-fide non-resident you simply work outside of the UK for long periods.

Paying your salary into an offshore account makes no difference for tax purposes it's still liable for UK tax as you are taxed on your worldwide income.