Moving abroad - UK TAX confusion

Grolsch30

Hi,

We have decide to move away from the UK in the latter part of this year and wondered if anyone can clarify and answer some niggling questions i have:

1. We are selling the house and going to register ourselves at my wifes parents so that we have a UK address for our post and bank statements etc. Now will we still be liable to pay tax on our overseas income (even if it is below £40k per year?), i ask because recently it was in the news about these ex domciled persons not living in the uk and still having to pay uk tax but that was for persons earning HUGE amounts of money which I most probably will not!
2. What do i need to tell the tax credits people? we have not received the yearly renewal yet for the new tax year, can I just tell them we don't want to renew our claim and leave it be to stop any complications when the time comes and then need to stop our claim midway threw the financial year.
3. Can we just not renew our tax credits application and leave it be?
4. If we are still on the electoral role and not paying any tax due to not having a job in the UK and not receiving a end of tax year P60 would this have any implications for us? ill the tax man ask why are these people on the electoral role and not claiming any kind of benefits???
5. Theoreticaly could we still claim the £20 child allowance (as we are British)? Is this what many Polish/ other non British people do when I read about people claiming benefits while their wifes and children still live overseas etc etc? ust to clear things up we are not going to claim but wanted to pose the question for clarification.

Cheers for any help :beer:

TM1976

If you move overseas to live and work, you are out of the UK for a whole tax year and you don't come back to the UK for more than 90 days a year on average you should not be subject to UK tax on you overseas income.

You need to fill out a P85 when you leave: http://www.hmrc.gov.uk/cnr/p85.pdf

I don't know about the ins and out of the benefits situation but if you aren't UK resident you can't claim benefits in the UK.

Grolsch30

TM1976 wrote: »

If you move overseas to live and work, you are out of the UK for a whole tax year and you don't come back to the UK for more than 90 days a year on average you should not be subject to UK tax on you overseas income.

You need to fill out a P85 when you leave: http://www.hmrc.gov.uk/cnr/p85.pdf

I don't know about the ins and out of the benefits situation but if you aren't UK resident you can't claim benefits in the UK.

The reason I ask was someone had been clobbered for tax even though he kept to the rules (red highlighted), because he still had connections here in the UK!


many thanks

scottn

you need to settle abroad, i.e. demonstrate ending your ties with the uk e.g. buying abroad, selling home, taking family with you, close UK accounts etc.

if you are non resident and away for atleast a full tax year, the income is non taxabl3 if it is earned abroad. If you rent out your home, you will be liable to pay tax on the rental income recieved in the UK and you will still have the normal personal allowance too.

you may also have to continue to pay NI for 52weeks from date of leaving.

olly300

Grolsch30 wrote: »

Hi,

1. Theoreticaly could we still claim the £20 child allowance (as we are British)? Is this what many Polish/ other non British people do when I read about people claiming benefits while their wifes and children still live overseas etc etc? ust to clear things up we are not going to claim but wanted to pose the question for clarification.

That is completely rubbish and the media has mis-lead people.

If you move to another country in the EU, or even the EEA, you will find they have reciprocal agreement with the UK about benefits. That means you are entitled to claim the benefits they give to their citizens and vice versa. So you can claim unemployment benefits and the child allowances their citizens claim even if your children don't make the move with you. It is part of a EU wide agreement.

Also you can have your UK bank accounts open and be registered to vote in the UK at the last place you lived at if you live aboard. HMRC won't be interested in your overseas income if you are paying full tax in that country, HMRC have a dual tax agreement with that country and are not extremely rich.

People who are non-domicile normally either choose countries that don't have tax agreements with the UK or structure their tax affairs so they avoid paying tax on their full income on the countries they reside in.

It's a good idea to write to Newcastle and tell them that you are leaving the country for NI reasons. Also you should contact your tax office and fill in the form to see if you can claim any tax back.

Grolsch30

would anything happen if i just left so basically register ourselves at my wifes parent address (for post/ bank statements etc), and just leave without filling the P85 form out.

i ask this because when i was 19 (going back 20 years) when i was single, i left my uk job and moved to Germany, started a German job paid German taxes etc and stayed there for 10 years.
After the 10 years i left my german job came back to the UK and started a new job.
I still had my original national insurance number and the only official mail i got was a couple of letters telling me i have missing years for my pension whih is logical as i was paying into the german pension for the 10 years i was working in germany.

Anyway when i was 19 i did not fill any paper work in at all, never even thought about it at the time to be honest i just left!

Now though older and hopefully a wee bit wiser with a wife and child.

What would happen if we just left without filling a P85 form, keeping our UK bank and saving accounts and being registered at the other halfs parents address?

We would have hopefully from the sale of our house have sizeable chunks of money distributed in uk saving/isa/investment accounts, sons child trust fund etc

System

Please see below.

Grolsch30 wrote: »

Hi,

What do i need to tell the tax credits people? we have not received the yearly renewal yet for the new tax year, can I just tell them we don't want to renew our claim and leave it be to stop any complications when the time comes and then need to stop our claim midway threw the financial year.

Can we just not renew our tax credits application and leave it be?

If you fail to renew your tax credit claim by 31st July 2010 then your claim will be terminated and you will be asked to repay all the tax credits you received from April 2010 until the date the claim was terminated. You need to tell TCO as soon as you are about to leave the UK to avoid an overpayment.

If we are still on the electoral role and not paying any tax due to not having a job in the UK and not receiving a end of tax year P60 would this have any implications for us? ill the tax man ask why are these people on the electoral role and not claiming any kind of benefits???

HMRC do not have access to the electoral roll and lots of people are unemployed and not in receipt of benefits. You need to complete the P85 form especially as your circumstances re investment income etc are considerably more complex than when you were 19.

Theoreticaly could we still claim the £20 child allowance (as we are British)? Is this what many Polish/ other non British people do when I read about people claiming benefits while their wifes and children still live overseas etc etc? ust to clear things up we are not going to claim but wanted to pose the question for clarification.

See here for guidance on claiming Child benefit when living abroad:-

http://www.hmrc.gov.uk/childbenefit/start/who-qualifies/live-work-abroad.htm

Citizens of the EEA can claim child benefit when they live in the UK and their spouse and kids reside in their home country. It normally takes 26 weeks, or longer, for a claim such as that to be processed as HMRC check with their home country to ensure they are not claiming a similar benefit there. However from your post I read it to be that you would all be leaving the UK so your situation would not be the same as the EEA citizen.

Cheers for any help :beer:

Grolsch30

Pam17 wrote: »

Please see below.

many thanks Pam 17,

i have just looked and read the link:

If you move abroad permanently

If you're going abroad permanently, or expect to be away for more than 52 weeks, you won't qualify for Child Benefit unless both of the following apply:

• you are moving to an EEA country or Switzerland
• you are paying UK NICs or receiving a UK National Insurance-related benefit

EEA countries are Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
You'll stop qualifying on the Sunday following the day you leave the UK or on the day itself if that's a Sunday.

If your child is staying in the UK and is being looked after by someone else, that person might want to claim Child Benefit.
You must let us know if you plan to move abroad permanently or if you're likely to be away for more than a year.
Let us know you're moving abroad permanently
If you live in another EEA country and get a National Insurance-related benefit from the UK

You can usually get Child Benefit if both of the following apply:

• you are living in an EEA country or Switzerland and receive a National Insurance-related benefit from the UK eg basic State Pension
• you are responsible for a child

If you're getting a child allowance from the country you live in and it's less than the UK rate of Child Benefit, we can make up the difference.





reading the above it sounds like i would be able to claim child benefit even though we live in a different country.
I have checked the child benefit in Germany and its 189 euro a month so substantially more but i cannot see myself being able to claim for both.

olly300

Grolsh30 both clauses in the above categories need to apply to claim Child Benefit in the UK. As you will be paying into the German Social Insurance system and your child will be moving with you, then you need to claim child benefit in Germany.

Pinedita

I would be really grateful for any advice here. I left the UK May last year with my husband and son. I didn´t complete any P85 form......stupidly didn´t realise I had to do that. We have rented out out house in the UK however as far as I am aware we are below the threshold for having to pay any UK taxes on it.
Thing is, my UK bank accounts are still open and have only just recently noticed that the child benefit and family part of the tax credit has still been getting paid into my account, even though we never renewed our claim last year as we moved away. We live in Ecuador.
My parents have recently sent me a load of old mail, and in it there is a Self Assessment form which I have to fill in on-line by January. If I fill this form in, will I have to pay back the full overpaid amount in one payment?...Can anyone give me some advice on what I should do? I know I should have been more organised at the time........

Thanks

chrismac1

Residence and non-residence is not as clear-cut as the 183 day, 90 day rule might imply. The accountancy have asked the OBR to look at this, with a view to coming up with a clear definition in law so everyone knows where they stand. For now we have various cases to go on. So if you qualify as non-resident by counting the days that is a good start, but:

1. Are you still registered with a UK GP?
2. Do you still hold a UK driving licence at DVLA?
3. Do you have active UK bank accounts?
4. Are you on the electoral register?
5. Do you own any UK property at the Land Registry?

Note that in today's surveillance society the Government has access to lots of information about you. These 5 things above are each electronic records about individuals that HMRC can potentially access just by doing a search on your name. If 5 out of 5 come up "yes" then if I was your accountant I've be giving you a strong risk warning about claiming you are a UK non-resident, regardless of how your counting of the days is going.