R85 R105

wkt54

Cook

What happens if I were to spend 5 months in France, 3 in Spain and 4 in the UK?

I would then not be a resident in France, having spent less than 187 days there.

But I wouldn't be classed as a resident in any country.

I'm thinking about the £100,000 I would have in the Halifax.

Would I be able to claim gross interest?

TCA

wkt54 wrote: »

Cook

What happens if I were to spend 5 months in France, 3 in Spain and 4 in the UK?

I would then not be a resident in France, having spent less than 187 days there.

But I wouldn't be classed as a resident in any country.

I think to be non UK resident you need to be away from the UK for a complete tax year then average less than 91 days p.a. in the UK thereafter over a certain period. So 4 months would be too long in the UK. You'd still receive your personal allowance if you are a British citizen.

But I don't see why you couldn't put your money in an offshore account and pay no tax if you alter your stay each year to less than the residency requirements for each country. I'm no expert though, so I'd get further advice on this.

Cook_County

wkt54 wrote: »

Cook

What happens if I were to spend 5 months in France, 3 in Spain and 4 in the UK?

I would then not be a resident in France, having spent less than 187 days there.

But I wouldn't be classed as a resident in any country.

I'm thinking about the £100,000 I would have in the Halifax.

Would I be able to claim gross interest?

This is a different question:
1. You remain UK resident so primarily liable to UK tax
2. The Beckham law means no Spanish tax
3. You are probably not fiscally domiciled in France but if you are then you turn to the France/UK tax treaty to determine the consequence.

Remaining UK resident could well be beneficial in eligibility for tax credits so may be the better answer.

TCA

Cook_County wrote: »

This is a different question:
1. You remain UK resident so primarily liable to UK tax
2. The Beckham law means no Spanish tax
3. You are probably not fiscally domiciled in France but if you are then you turn to the France/UK tax treaty to determine the consequence.

Remaining UK resident could well be beneficial in eligibility for tax credits so may be the better answer.

Cook_County - Ignoring tax credits for the moment, would your opinion change if the OP was away from the UK for a complete tax year then averaged visits of less than 91 days p.a? Assuming he is also neither resident in France or Spain due to the short stays, would this be a legitimate way of avoiding tax altogether? And would an offshore account help for this purpose?

Cook_County

Oddly my view would be the same - because the OP would have to be in full-time employment overseas to be certain of achieving non-UK residency.

If this was the case here then there would be local tax and social costs payable in France, Spain etc which could be as great as those in the UK.

TCA

Cook_County wrote: »

Oddly my view would be the same - because the OP would have to be in full-time employment overseas to be certain of achieving non-UK residency.

Is this really the case? According to IR20, you can give evidence to show that you've left the UK permanently (house sale or acquisition of property abroad perhaps) but even if you don't have such evidence, as long as you have gone abroad for a "settled purpose" you will be treated as NR and NOR from the day after the date of UK departure. This would include "a fixed object or intention in which you are going to be engaged for an extended period of time". So would this not cover retirees or people in similar circumstances? Surely you don't need to be working to lose UK residency?

Cook_County

TCA wrote: »

Is this really the case? According to IR20, you can give evidence to show that you've left the UK permanently (house sale or acquisition of property abroad perhaps) but even if you don't have such evidence, as long as you have gone abroad for a "settled purpose" you will be treated as NR and NOR from the day after the date of UK departure. This would include "a fixed object or intention in which you are going to be engaged for an extended period of time". So would this not cover retirees or people in similar circumstances? Surely you don't need to be working to lose UK residency?

IR20 is of course not law, it is HMRCs very tired interpretation of case law.

There is no "settled purpose" here in the OPs question; instead all we have is a traveller who is having long holidays in various places.

If however the OP had - say - family or a holiday home in one or more country you might be able to construct a settled purpose - eg to spend time with my grandchildren or retire permanently to the South of France where the OP then registers as a resident.

wkt54

Leaving the UK permanently or indefinitely
2.7 If you go abroad permanently, you will be treated as remaining resident and ordinarily resident if your visits to the UK average 91 days or more a year - see paragraph 2.10. Any days spent in the UK because of exceptional circumstances beyond your control, for example the illness of yourself or your immediate family, are not normally counted for the purposes of averaging your visits.

If you have left the UK permanently or for at least three years, you will be treated as not resident and not ordinarily resident from the day after the date of your departure providing

• your absence from the UK has covered at least a whole tax year, and
• your visits to the UK since leaving - have totalled less than 183 days in any tax year, and
  - have averaged less than 91 days a tax year.

Could someone explain what the 91 days means exactly please. Sorry, but this is getting even more confusing.

TCA

The average over the three year period has to be less than 91 days per year and you can't spend more than 182 days in any one year in the UK.

i.e. over 3 years you can spend up to 270 days (90x3) in the UK but with a maximum of 182 days in any one year.

e.g
year 1 80 days
year 2 100 days
year 3 90 days

or

year 1 88 days
year 2 182 days
year 3 0 days

Hope this helps.

Cook_County

TCA is correct BUT in HMRCs view these day tests are only applicable if the first leg of paragraph 2.7 is met; i.e. "you you go abroad permanently".

The OP has no intention of going abroad permanently so will remain domestically UK resident (and taxable on worldwide income) unless this intention changes or relief is available under a double tax treaty.