Tax for Living Abroad

BimalP

I just wanted to get some advice on this board before I consult any tax consultants... Just to get an idea of what options are available to me.
Basically, at the beginning of 2013 my company is shipping me and my family to China. We have signed up for 5 years (60 months). The question that I have arises from the fact of what to do when I transfer money over to the UK.
We are lucky enough to have basically all of our living and expenses paid by the company and we will only need some pocket money for general spending, what is also nice is that my wife will also work and get a salary.

Our challenge is that we really do not want to leave a large lump sum in a Chinese Bank account, as they have rules about how much money you can take when you eventually leave the country. Therefore we will more than likely be ok with my wife salary as spending money.
I have agreed with my company that they should pay my salary in Europe, and now we need to decide where. As I am not an expert in this area, I was looking for some general advice.
I should add that I will pay the "full tax" on my gross salary in China, and the company will pay me my Net sum into a bank account in EU, based on the spot rate of the day.
I do not plan to sepnd longer than 30 days a year in the UK, at a push it might be 40 ...

If I receive regularly a payment into my UK bank account, what tax am I liable for?

Is there someway to offset this tax? - I am looking for the best possible alternatives.

What are the best options open for me?

I am also checking the swedish tax system (where we live currently), and also some other possibilities where we have some financial ties.
I hope someone can help me....

jimmo

As a general principle you may be liable to tax both in the country where the income arises (the country where you do the work) and in country where you are resident.

As you are taking a 5 year posting to China it is almost certain that the only country that will be able to tax your earnings will be China.

Having your salary paid into a UK bank account certainly won’t make any difference and will not create a UK tax liability. Probably the same for any EU country.

Cook_County

You may of course owe Chinese tax on any interest you earn.

Don't frget to investigate voluntary UK NI contributions to protect pension rights.

supersally01

Hi,

Remember that the tax rules may change from April 2013, with any monies being earned abroad subject to tax, if you have a home or family in the UK.

Earnings will continue to be tax free, as long as the non resident spends on longer than 15 days in the UK.

My advice is to see a tax advisor. I have already had a letter from the tax man, asking for details of my circumstances. In my opinion, there has never been a better time to leave the UK!
Sally.

antrobus

In these circumstances, expats usually look offshore for their banking. There's a whole industry out there that specifically targets this market. OP's existing UK bank very likely has a subsidiary somewhere (probably CI or IoM) that would be happy to do business.

Cook_County

You may also want to investigate your social security position and whether any existing non-Chinese pension plans would be taxed by China.