PhilipH
regular
Reged: 30/03/2005
Posts: 563
Loc: Northern Ireland
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As plans progress for leaving these chilly northern waters, the subject of finances was being debated and whether it is possible to avail of the pay no tax if you are out of the country for more than 180 days. Do you have to be domiciled somewhere else? If so how does this work? And what happens if you retain a property in UK for those occasional visits?
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trouville
regular
Reged: 10/06/2004
Posts: 2847
Loc: crusing with an Arpège
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Tax!The eec and governments seem to want more and more.
If you keep a property rented or owned you will have to pay taxes that is eates rubbish etc if your there or not
Income tax "very basically" is paid where ever you stay for 6 moths or more.If you become a "boat person"i expect you may depending on the registration pay in the country of registration.
I really depends on your wealth, cash in bank and income.If you have none of those therefore cant afford to be tied up in say Spain you would have to ask a tax specalist if you really want to pay
If you do pay in say Spain you will be elegable for heath welfare benefits.You simply have to decide what you can pay and what you want
If you want freedom from the troubles of wealth and what to do with your cash you should still have private health insc
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liveaboard
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Conachair
regular
Reged: 24/01/2004
Posts: 522
Loc: Canaries
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Changing domicile is apparently very difficult but non residence is the term for tax purposes. I pay no UK tax on anything earned outside of uk (even though working for a uk company) and declare anything (which is nearly nothing) earned inside. But it's not as cut and dried as you might think. i spoke an office and phoned as well and the gist of it was " if you're non resident and earning money outside the uk we don't care". Determining nonresident is the bit which isn't cut and dried I think, property may be a problem as they might see you as just going on a "big holiday for a few years", I sold my house. Can't remember the no of days (travel days count now as well) allowed inside UK and how many years you need to be away for but that will all be on a inland revenue somewhere. How long are you panning to go for? I can't afford to go back now as I'd get hammered for tax, oh well, I'll stay in the sun then 
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LadyJessie
regular
Reged: 21/11/2006
Posts: 1116
Loc: the Med
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It is very difficult to give tax advice without knowing the personal circumstances. Giving general advice can easily become nonsensical at best and misleading at worst. I would recommend that you talk to a tax adviser. (I have been one myself so this is an unashamed plug for my old profession.)
Having said that disclaimer; yes it is possible under certain circumstances to avoid paying any tax. You don't have to be resident anywhere, it is perfectly OK to be resident on your boat 'on the seven seas' without any tax liability. However, if you retain a property and has income in the UK; you are resident for tax purposes. Other concerns than just tax should also be taken into account when choosing residency. If you are not resident anywhere, you are also not covered by any medical and social security. You might find that maintaining a 'residency' could mean a saving in medical insurance that could be larger than your tax bill.
Lots more variables that are too complicated to go into on a general thread, talk to an adviser. (wow, I got two plugs in.... getting good at this...) 
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Relax
regular
Reged: 18/04/2007
Posts: 161
Loc: ked out again!
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Hi,
Good luck on your voyage - still planning (mostly financial) here but getting nearer!
You have to establish non-resisdence for tax purposes - which means you must not spend more than (about) 180 days in any 12 month period in the UK or average more than ...... ? I've forgotten I'm afraid.
Best advice is to go to the HMRC website and check - these things do and have recently changed.
Last time I did the expat bit (not too long ago) there was a form available to submit to HMRC so that you could declare the date from which became non-resident.
Its also a good idea to collect evidence of this non-residence - because they can and have asked for airline tickets etc. This will be more difficult for you but I would have thought something would be possible - there's a new reason for keeping a comprehensive log.
Enjoy your sailing........
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All men dream, but not equally.
Those who dream by night, in the dusty recesses of their minds,
wake in the day to find that it was vanity.
But the dreamers of the day are dangerous men,
for they may act their dreams with open eyes, to make it possible.
- T.E. Lawrence -
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wingdiver
regular
Reged: 12/05/2005
Posts: 421
Loc: Eastern UK
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Hi
As LadyJessie has said, you really need to get advice based on your own specific circumstances to avoid making a big mistake.
From my own research, there are a few general things to note:
Domicile is very difficult to change - it is generally where you are born or, in some circumstances - your family's home country.
Residence is the thing for you to look at. These days, it is dealt with initially looking at tax years (ending 5 April). If you leave the UK and return after a complete tax year has elapsed you can be non-resident for the period you are away. In other words, if you go away on 1 April 2008 and come back on 10 April 2009 you are OK. If you go on 1 May 2008 and come back on 10 May 2009, you are not.
The next thing to consider is time spent in the UK during the period of non-residence as too much time in the UK may lead you to be treated as resident after all.
This is something where the rules have recently changed in that, you used to count the day of arrival and departure as days out of the UK but now that is not necessarily the case.
The Revenues guidance is that someone is resident if that person is in the UK for 183 days or more in the tax year;
or
the person visits the UK regularly and after four years the visits during those years average 91 days or more a tax year.
However, for this purpose any days spent in the UK for exceptional circumstances beyond the person’s control, for example, the illness of the person or a member of his or her immediate family are ignored for the 91 days (but not the 183 day test).
It also seems that, if you are resident in the UK, you are taxed on your 'world income' via your UK return and will get credit for the tax paid at source on the overseas income up to the level of UK tax due on it.
If you are not resident, you are still taxed on your UK income in the UK.
Hope that helps.
I hope someone else more versed in these matters can come along and add to the debate.
D
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"I'm on a whisky diet, i've lost three days already"
"I went to buy some camouflage trousers the other day but I couldn't find any"
"I bought some HP sauce the other day. It's costing me 6p a month for the next 2 years"
Tommy Cooper
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trouville
regular
Reged: 10/06/2004
Posts: 2847
Loc: crusing with an Arpège
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Just add another word
If or when you decide to be "resident" take advice before contacting the powers that be,once you start the paper work which in say France is really easy,but once started its really very hard to stop!
Be very sure you have ALL the things you will need BEFORE you go along phone or write.
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liveaboard
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KellysEye
regular
Reged: 23/07/2006
Posts: 758
Loc: Bonaire
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>You don't have to be resident anywhere, it is perfectly OK to be resident on your boat 'on the seven seas' without any tax liability.
I think that's changed. We checked with two tax specialists in the last year and were advised that if you have assets in the UK (e.g.property) to avoid UK tax:
- you must have a fixed residence abroad.
- you must be registered with the tax authorities in the new country.
Both requiire paperwork to prove it.
Edited by KellysEye (23/04/2008 16:55)
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JamesFrance
regular
Reged: 24/10/2006
Posts: 279
Loc: Carcassonne & Sant Carles
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I am tax resident in France since July 2006. The UK Inland Revenue are still making me pay tax there also until they get round to dealing with a Form France Individual. This form had to be submitted to them via my French Tax Office, stamped to prove I am in the French system. The Inland Revenue have said that they did receive this form last October, however they are rather overworked and will get round to it eventually. Then I should get a refund.
This web site should be of interest:
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/LeavingOrComingIntoTheUK/DG_10026234
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James
Dolphin of Menai
Beneteau Oceanis 311.
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LadyJessie
regular
Reged: 21/11/2006
Posts: 1116
Loc: the Med
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Quote:
>You don't have to be resident anywhere, it is perfectly OK to be resident on your boat 'on the seven seas' without any tax liability.
I think that's changed.
No, I do not think it has. A tax authority cannot force you to set up residency somewhere else, and actually they don't care. They only care if you have established residency in their own territory or not. It is true that residency in another country can be one, but by no means the only, way to prove that you do not any longer have residency in your first country. To make this even more complicated; you can actually have residency in many countries, so a new residency actually does not prove anything.
I think there is a special branch of 'revenue' that deals with these 'non-resident anywhere' issues and I think it is located in Plymouth or somewhere down that way.
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